Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2022 | Oct. 24, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Fiscal Period Focus | Q3 | |
Document Period End Date | Sep. 30, 2022 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Entity File Number | 001-39218 | |
Entity Registrant Name | CONMED CORPORATION | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 16-0977505 | |
Entity Address, Address Line One | 11311 Concept Blvd | |
Entity Address, City or Town | Largo, | |
Entity Address, State or Province | FL | |
Entity Address, Postal Zip Code | 33773 | |
City Area Code | 727 | |
Local Phone Number | 392-6464 | |
Title of 12(b) Security | Common Stock, $0.01 par value | |
Trading Symbol | CNMD | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 30,482,412 | |
Entity Central Index Key | 0000816956 | |
Amendment Flag | false |
Consolidated Condensed Statemen
Consolidated Condensed Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net sales | $ 275,088 | $ 248,827 | $ 794,605 | $ 736,665 |
Cost of sales | 123,473 | 106,521 | 355,222 | 324,485 |
Gross profit | 151,615 | 142,306 | 439,383 | 412,180 |
Selling and administrative expense | 114,600 | 104,736 | 333,302 | 307,476 |
Research and development expense | 12,767 | 10,859 | 34,932 | 32,203 |
Operating expenses | 127,367 | 115,595 | 368,234 | 339,679 |
Income from operations | 24,248 | 26,711 | 71,149 | 72,501 |
Interest expense | 8,536 | 8,145 | 19,462 | 27,917 |
Other expense | 0 | 1,127 | 112,011 | 1,127 |
Income (loss) before income taxes | 15,712 | 17,439 | (60,324) | 43,457 |
Provision (benefit) for income taxes | (30,438) | 2,491 | 46,842 | 5,359 |
Net income (loss) | 46,150 | 14,948 | (107,166) | 38,098 |
Comprehensive income (loss) | $ 43,125 | $ 13,756 | $ (113,096) | $ 42,242 |
Per share data: | ||||
Basic (in dollars per share) | $ 1.51 | $ 0.51 | $ (3.59) | $ 1.31 |
Diluted (in dollars per share) | $ 1.48 | $ 0.47 | $ (3.59) | $ 1.19 |
Weighted average common shares: | ||||
Basic (shares) | 30,473 | 29,179 | 29,892 | 29,097 |
Diluted (shares) | 31,103 | 32,143 | 29,892 | 32,020 |
Consolidated Condensed Balance
Consolidated Condensed Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 33,354 | $ 20,847 |
Accounts receivable, net | 197,287 | 183,882 |
Inventories | 304,813 | 231,644 |
Prepaid expenses and other current assets | 38,789 | 23,750 |
Total current assets | 574,243 | 460,123 |
Property, plant and equipment, net | 113,720 | 108,863 |
Goodwill | 814,260 | 617,528 |
Other intangible assets, net | 689,453 | 471,049 |
Other assets | 100,368 | 108,454 |
Total assets | 2,292,044 | 1,766,017 |
Current liabilities: | ||
Current portion of long-term debt | 237 | 12,249 |
Accounts payable | 74,228 | 58,197 |
Accrued compensation and benefits | 54,095 | 60,488 |
Other current liabilities | 80,019 | 65,712 |
Total current liabilities | 208,579 | 196,646 |
Long-term debt | 1,036,438 | 672,407 |
Deferred income taxes | 112,578 | 68,537 |
Other long-term liabilities | 218,112 | 42,992 |
Total liabilities | 1,575,707 | 980,582 |
Commitments and contingencies | ||
Shareholders' equity: | ||
Preferred stock, par value $.01 per share; authorized 500,000 shares; none outstanding | 0 | 0 |
Common stock, par value $0.01 per share; 100,000,000 shares authorized; 31,299,194 shares issued in 2022 and 2021, respectively | 313 | 313 |
Paid-in capital | 407,095 | 396,771 |
Retained earnings | 392,144 | 496,605 |
Accumulated other comprehensive loss | (60,133) | (54,203) |
Less: 822,438 and 1,925,893 shares of common stock in treasury, at cost, in 2022 and 2021, respectively | (23,082) | (54,051) |
Total shareholders’ equity | 716,337 | 785,435 |
Total liabilities and shareholders’ equity | $ 2,292,044 | $ 1,766,017 |
Consolidated Condensed Balanc_2
Consolidated Condensed Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 500,000 | 500,000 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 31,299,194 | 31,299,194 |
Treasury stock, shares (in shares) | 822,438 | 1,925,893 |
Consolidated Condensed Statem_2
Consolidated Condensed Statements of Shareholders' Equity (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | |
Balance at period start (shares) at Dec. 31, 2020 | 31,299 | ||||||
Balance at period start at Dec. 31, 2020 | $ 709,038 | $ 313 | $ 382,628 | $ 457,417 | $ (63,681) | $ (67,639) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Common stock issued under employee plans | 8,215 | 2,944 | 5,271 | ||||
Stock-based compensation | 3,387 | 3,387 | |||||
Dividends on common stock ($0.20 per share) | (5,813) | (5,813) | |||||
Comprehensive income (loss): | |||||||
Cash flow hedging gain, net | 3,926 | ||||||
Pension liability, net of income tax | 631 | ||||||
Foreign currency translation adjustments | (3,674) | ||||||
Net income (loss) | 9,860 | ||||||
Comprehensive income (loss) | 10,743 | ||||||
Balance at period end (shares) at Mar. 31, 2021 | 31,299 | ||||||
Balance at period end at Mar. 31, 2021 | 725,570 | $ 313 | 388,959 | 461,464 | (62,798) | (62,368) | |
Balance at period start (shares) at Dec. 31, 2020 | 31,299 | ||||||
Balance at period start at Dec. 31, 2020 | 709,038 | $ 313 | 382,628 | 457,417 | (63,681) | (67,639) | |
Comprehensive income (loss): | |||||||
Cash flow hedging gain, net | 8,064 | ||||||
Pension liability, net of income tax | 1,893 | ||||||
Foreign currency translation adjustments | (5,813) | ||||||
Net income (loss) | 38,098 | ||||||
Comprehensive income (loss) | 42,242 | ||||||
Balance at period end (shares) at Sep. 30, 2021 | 31,299 | ||||||
Balance at period end at Sep. 30, 2021 | 755,683 | $ 313 | 394,810 | 478,035 | (59,537) | (57,938) | |
Balance at period start (shares) at Mar. 31, 2021 | 31,299 | ||||||
Balance at period start at Mar. 31, 2021 | 725,570 | $ 313 | 388,959 | 461,464 | (62,798) | (62,368) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Common stock issued under employee plans | 2,726 | 414 | 2,312 | ||||
Stock-based compensation | 4,290 | 4,290 | |||||
Dividends on common stock ($0.20 per share) | (5,830) | (5,830) | |||||
Comprehensive income (loss): | |||||||
Cash flow hedging gain, net | 1,221 | ||||||
Pension liability, net of income tax | 631 | ||||||
Foreign currency translation adjustments | 2,601 | ||||||
Net income (loss) | 13,290 | ||||||
Comprehensive income (loss) | 17,743 | ||||||
Balance at period end (shares) at Jun. 30, 2021 | 31,299 | ||||||
Balance at period end at Jun. 30, 2021 | 744,499 | $ 313 | 393,663 | 468,924 | (58,345) | (60,056) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Common stock issued under employee plans | (1,062) | (3,180) | 2,118 | ||||
Stock-based compensation | 4,327 | 4,327 | |||||
Dividends on common stock ($0.20 per share) | (5,837) | (5,837) | |||||
Comprehensive income (loss): | |||||||
Cash flow hedging gain, net | 2,917 | 2,917 | |||||
Pension liability, net of income tax | 631 | 631 | |||||
Foreign currency translation adjustments | (4,740) | (4,740) | |||||
Net income (loss) | 14,948 | 14,948 | |||||
Comprehensive income (loss) | 13,756 | ||||||
Balance at period end (shares) at Sep. 30, 2021 | 31,299 | ||||||
Balance at period end at Sep. 30, 2021 | 755,683 | $ 313 | 394,810 | 478,035 | (59,537) | (57,938) | |
Balance at period start (shares) at Dec. 31, 2021 | 31,299 | ||||||
Balance at period start at Dec. 31, 2021 | 785,435 | $ 313 | 396,771 | 496,605 | (54,203) | (54,051) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Common stock issued under employee plans | 6,252 | 2,232 | 4,020 | ||||
Stock-based compensation | 4,463 | 4,463 | |||||
Dividends on common stock ($0.20 per share) | (5,899) | (5,899) | |||||
Comprehensive income (loss): | |||||||
Cash flow hedging gain, net | 1,082 | ||||||
Pension liability, net of income tax | 521 | ||||||
Foreign currency translation adjustments | (163) | ||||||
Net income (loss) | 14,975 | ||||||
Comprehensive income (loss) | $ 16,415 | ||||||
Accounting Standards Update [Extensible Enumeration] | Accounting Standards Update 2020-06 | ||||||
Balance at period end (shares) at Mar. 31, 2022 | 31,299 | ||||||
Balance at period end at Mar. 31, 2022 | $ 789,546 | $ 313 | 365,555 | 526,472 | (52,763) | (50,031) | |
Balance at period end (Accounting Standards Update 2020-06) at Mar. 31, 2022 | [1] | (17,120) | (37,911) | 20,791 | |||
Balance at period start (shares) at Dec. 31, 2021 | 31,299 | ||||||
Balance at period start at Dec. 31, 2021 | 785,435 | $ 313 | 396,771 | 496,605 | (54,203) | (54,051) | |
Comprehensive income (loss): | |||||||
Cash flow hedging gain, net | 10,577 | ||||||
Pension liability, net of income tax | 1,502 | ||||||
Foreign currency translation adjustments | (18,009) | ||||||
Net income (loss) | (107,166) | ||||||
Comprehensive income (loss) | (113,096) | ||||||
Balance at period end (shares) at Sep. 30, 2022 | 31,299 | ||||||
Balance at period end at Sep. 30, 2022 | 716,337 | $ 313 | 407,095 | 392,144 | (60,133) | (23,082) | |
Balance at period start (shares) at Mar. 31, 2022 | 31,299 | ||||||
Balance at period start at Mar. 31, 2022 | 789,546 | $ 313 | 365,555 | 526,472 | (52,763) | (50,031) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Common stock issued under employee plans | 1,244 | 611 | 633 | ||||
Stock-based compensation | 5,755 | 5,755 | |||||
Dividends on common stock ($0.20 per share) | (6,092) | (6,092) | |||||
Stock Issued During Period, Value, Conversion of Convertible Securities | 0 | (25,890) | 25,890 | ||||
Adjustments to Additional Paid in Capital, Convertible Note Premium on Extinguishment | 103,125 | 103,125 | |||||
Adjustments to Additional Paid in Capital, Settlement of Convertible Notes Hedge Transactions | 118,912 | 118,912 | |||||
Adjustments to Additional Paid in Capital, Warrant Settled | (96,758) | (96,758) | |||||
Adjustments to Additional Paid in Capital, Convertible Note Hedge, Net of Income Tax | (142,128) | (142,128) | |||||
Issuance of warrants | 72,000 | 72,000 | |||||
Comprehensive income (loss): | |||||||
Cash flow hedging gain, net | 4,662 | ||||||
Pension liability, net of income tax | 490 | ||||||
Foreign currency translation adjustments | (9,497) | ||||||
Net income (loss) | (168,291) | ||||||
Comprehensive income (loss) | (172,636) | ||||||
Balance at period end (shares) at Jun. 30, 2022 | 31,299 | ||||||
Balance at period end at Jun. 30, 2022 | 672,968 | $ 313 | 401,182 | 352,089 | (57,108) | (23,508) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Common stock issued under employee plans | 585 | 159 | 426 | ||||
Stock-based compensation | 5,754 | 5,754 | |||||
Dividends on common stock ($0.20 per share) | (6,095) | (6,095) | |||||
Comprehensive income (loss): | |||||||
Cash flow hedging gain, net | 4,833 | 4,833 | |||||
Pension liability, net of income tax | 490 | 490 | |||||
Foreign currency translation adjustments | (8,348) | (8,348) | |||||
Net income (loss) | 46,150 | 46,150 | |||||
Comprehensive income (loss) | 43,125 | ||||||
Balance at period end (shares) at Sep. 30, 2022 | 31,299 | ||||||
Balance at period end at Sep. 30, 2022 | $ 716,337 | $ 313 | $ 407,095 | $ 392,144 | $ (60,133) | $ (23,082) | |
[1] (1) We recorded the cumulative impact of adopting ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity in 2022. Refer to Note 3 for further detail. |
Consolidated Condensed Statem_3
Consolidated Condensed Statements of Shareholders' Equity (Unaudited) (Parenthetical) - $ / shares | 3 Months Ended | |||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | |
Statement of Stockholders' Equity [Abstract] | ||||||
Dividends per share of common stock (in dollars per share) | $ 0.20 | $ 0.20 | $ 0.20 | $ 0.20 | $ 0.20 | $ 0.20 |
Consolidated Condensed Statem_4
Consolidated Condensed Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (107,166) | $ 38,098 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation | 12,028 | 12,519 |
Amortization of debt discount | 0 | 7,611 |
Amortization of deferred debt issuance costs | 3,404 | 2,946 |
Amortization | 39,754 | 40,747 |
Stock-based compensation | 15,972 | 12,003 |
Deferred income taxes | 38,442 | (1,311) |
Loss on early extinguishment of debt | 3,426 | 899 |
Loss on convertible notes conversion premium | 103,125 | 0 |
Loss on convertible notes hedge transactions settlement | 5,460 | 0 |
Increase (decrease) in cash flows from changes in assets and liabilities: | ||
Accounts receivable | (16,092) | 9,890 |
Inventories | (52,126) | (34,679) |
Accounts payable | 14,475 | (6,223) |
Accrued compensation and benefits | (8,261) | 5,030 |
Other assets | (11,710) | (15,915) |
Other liabilities | 4,232 | 6,370 |
Net cash provided by operating activities | 44,963 | 77,985 |
Cash flows from investing activities: | ||
Purchases of property, plant and equipment | (16,109) | (11,678) |
Payments related to business acquisition, net of cash acquired | (227,102) | 0 |
Net cash used in investing activities | (243,211) | (11,678) |
Cash flows from financing activities: | ||
Payments on term loan | (92,981) | (63,673) |
Proceeds from term loan | 0 | 52,411 |
Payments on revolving line of credit | (404,000) | (272,753) |
Proceeds from revolving line of credit | 317,000 | 236,753 |
Payments to redeem convertible notes | (275,000) | 0 |
Proceeds from issuance of convertible notes | 800,000 | 0 |
Payments related to debt issuance costs | (21,830) | (2,000) |
Dividends paid on common stock | (17,865) | (17,418) |
Purchases of convertible notes hedge transactions | (187,600) | 0 |
Proceeds from issuance of warrants | 72,000 | 0 |
Proceeds from settlement of convertible notes hedge transactions | 86,228 | 0 |
Payment for settlement of warrants | (69,534) | 0 |
Other, net | 7,067 | 5,921 |
Net cash provided by (used in) financing activities | 213,485 | (60,759) |
Effect of exchange rate changes on cash and cash equivalents | (2,730) | (1,393) |
Net increase in cash and cash equivalents | 12,507 | 4,155 |
Cash and cash equivalents at beginning of period | 20,847 | 27,356 |
Cash and cash equivalents at end of period | 33,354 | 31,511 |
Non-cash investing and financing activities: | ||
Contingent consideration | 183,914 | 0 |
Dividends payable | $ 6,095 | $ 5,837 |
Operations
Operations | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Operations | OperationsCONMED Corporation (“CONMED”, the “Company”, “we” or “us”) is a medical technology company that provides surgical devices and equipment for minimally invasive procedures. The Company’s products are used by surgeons and other healthcare professionals in a variety of specialties including orthopedics, general surgery, gynecology, thoracic surgery and gastroenterology. |
Interim Financial Information
Interim Financial Information | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Interim Financial Information | Interim Financial Information The accompanying unaudited consolidated condensed financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for annual financial statements. The information herein reflects all normal recurring material adjustments, which are, in the opinion of management, necessary to fairly present the results for the periods presented. The consolidated condensed financial statements herein consist of all wholly-owned domestic and foreign subsidiaries with all significant intercompany transactions eliminated. Results for the period ended September 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. The consolidated condensed financial statements and notes thereto should be read in conjunction with the consolidated financial statements and notes for the year ended December 31, 2021 included in our Annual Report on Form 10-K. Use of Estimates Preparation of the consolidated condensed financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated condensed financial statements and the reported amounts of revenue and expenses during the reporting period. Due to the COVID-19 pandemic, there has been uncertainty and disruption in the global economy and financial markets. We are not aware of any specific event or circumstance that would require an update to our estimates or judgments or a revision of the carrying value of our assets or liabilities as of October 27, 2022, the date of issuance of this Quarterly Report on Form 10-Q. These estimates may change, as new events occur and additional information is obtained. Actual results could differ materially from these estimates under different assumptions or conditions. |
New Accounting Pronouncements
New Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements Recently Adopted Accounting Standards In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity ("ASU 2020-06"), which simplifies the accounting for convertible instruments by removing certain separation models requiring separate accounting for embedded conversion features which will result in more convertible debt instruments accounted for as a single liability. The ASU eliminates certain settlement conditions that are required for equity classification to qualify for the derivative scope exception. The ASU addresses how convertible instruments are accounted for in the calculation of diluted earnings per share by using the if-converted method. The ASU is effective for fiscal years beginning after December 15, 2021, with early adoption permitted no earlier than fiscal years beginning after December 15, 2020. The Company adopted this standard on January 1, 2022 using the modified retrospective method. The adoption of this new guidance resulted in: • an increase of approximately $22.6 million to long-term debt in the consolidated condensed balance sheets, to reflect the full principal amount of the convertible notes then outstanding net of issuance costs (the "2.625% Notes" described more fully in Note 11); • a reduction of approximately $37.9 million to additional paid-in capital, net of income tax effects, to remove the equity component separately recorded for the conversion features associated with the 2.625% Notes; • a decrease to deferred income tax liabilities of approximately $5.5 million, and • a cumulative-effect adjustment of approximately $20.8 million, net of income tax effects, to the beginning balance of retained earnings as of January 1, 2022. The adoption of this new guidance reduced interest expense related to amortization of debt discount on the 2.625% Notes by approximately $2.6 million during the three months ended March 31, 2022. Additionally, the dilutive share count increased by approximately 2.5 million shares as a result of calculating the impact of dilution from the 2.625% Notes using the if-converted method. During the nine months ended September 30, 2022, the Company repurchased and extinguished $275.0 million principal value of the 2.625% Notes as further discussed in Note 11. Concurrently, the Company entered into a Supplemental Indenture related to the remaining $70.0 million in 2.625% Notes, pursuant to which the Company irrevocably elected to settle the principal value of those 2.625% Notes in cash. As a result, in periods in which the Company has net income, only the conversion premium will affect the dilutive share count. During the three months ended September 30, 2022, our average share price exceeded the conversion price of the 2.625% Notes and we included such shares assumed to be issued if the Notes were converted in our diluted share count. Refer to Note 9 for further details. As the Company was in a net loss position for the nine months ended September 30, 2022, there were no dilutive potential shares included in the computation of diluted shares outstanding for the nine months ended September 30, 2022. Recently Issued Accounting Standards, Not Yet Adopted In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional guidance if certain criteria are met for entities that have contracts, hedging relationships, and other transactions that reference LIBOR or other reference rates expected to be discontinued as a result of reference rate reform. This ASU is effective as of March 12, 2020 through December 31, 2022. The Company has not adopted this ASU as of September 30, 2022. Our seventh amended and restated senior credit agreement includes language to address the change from LIBOR to an alternative base rate, therefore we do not believe reference rate reform will have a significant impact on our consolidated financial statements, however will continue to monitor our transition away from LIBOR and the potential to elect to apply this guidance in our consolidated financial statements in the event that we are impacted by reference rate reform. |
Business Combinations
Business Combinations | 9 Months Ended |
Sep. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Combinations | Business Combinations On June 13, 2022, we acquired In2Bones Global, Inc. ("In2Bones") and all of its stock (the "In2Bones Acquisition") for an aggregate upfront payment of $145.2 million in cash. In addition, there are potential earn-out payments to In2Bones’ equity holders in an amount up to $110.0 million based on the achievement of certain revenue targets for In2Bones products during the sixteen (16) successive quarters commencing on July 1, 2022. In2Bones is a global developer, manufacturer and distributor of medical devices for the treatment of disorders and injuries of the upper (hand, wrist and elbow) and lower (foot and ankle) extremities. The In2Bones Acquisition was funded through a combination of cash on hand and long-term borrowings as further described in Note 11. On August 9, 2022, we acquired Biorez, Inc. ("Biorez") and all of its stock (the "Biorez Acquisition") for an aggregate upfront payment of $85.9 million in cash. We paid $83.1 million upon closing, with a $2.8 million purchase price adjustment holdback, pursuant to the merger agreement for the Biorez Acquisition. In addition, there are potential earn-out payments to Biorez’ equity holders in an amount up to $165.0 million based on the achievement of certain revenue targets for Biorez products during the sixteen (16) successive quarters commencing on October 1, 2022. Biorez is a medical device start-up focused on advancing the healing of soft tissue using its proprietary BioBrace ® implant technology. The Biorez Acquisition was funded through a combination of cash on hand and long-term borrowings. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed as a result of the In2Bones and Biorez Acquisitions that were accounted for as business combinations. The assessment of fair value is based on preliminary valuations and estimates that were available to management at the time the consolidated condensed financial statements were prepared. Accordingly, the allocation of purchase price is preliminary and therefore subject to adjustment during the measurement adjustment period. In2Bones Biorez Cash $ 445 $ 742 Accounts receivable, net 5,036 318 Inventories 24,247 61 Prepaid expenses and other current assets 403 118 Current assets 30,131 1,239 Goodwill 139,816 59,176 Developed technology 37,300 176,300 Distributor relationships 27,600 — Trademarks and tradenames — 1,600 Other long-term assets 2,875 112 Total assets acquired $ 237,722 $ 238,427 Current liabilities assumed 5,972 1,441 Deferred income taxes 16,699 36,621 Contingent consideration 69,402 114,512 Other long-term liabilities 466 — Total liabilities assumed $ 92,539 $ 152,574 Net assets acquired $ 145,183 $ 85,853 The goodwill recorded as part of the In2Bones Acquisition primarily represents revenue synergies, the related cost to enter into this new product offering and the In2Bones assembled workforce. Goodwill is not deductible for tax purposes. In2Bones distributor relationships and developed technology are each being amortized over a weighted average life of 15 years. The goodwill recorded as part of the Biorez Acquisition primarily represents revenue synergies, the related cost to enter into this new product offering and the Biorez assembled workforce. Goodwill is not deductible for tax purposes. Biorez developed technology and trademarks and tradenames are each being amortized over a weighted average life of 20 years. The contingent consideration was recorded at fair value at the date of acquisition based on the consideration expected to be transferred, estimated as the probability-weighted future cash flows, discounted back to present value. The fair value of contingent consideration is measured using projected payment dates, discount rates, probabilities of payment, and projected revenues. The recurring Level 3 fair value measurements of contingent consideration for which the liability is recorded include the following significant unobservable inputs: Assumptions Unobservable Input In2Bones Biorez Discount rate 5.67% 10.34% Revenue volatility 12.75% 18.87% Projected year of payment 2023-2026 2023-2026 We recorded $10.0 million in net sales for In2Bones products during the third quarter and a total of $12.1 million in net sales since the date of acquisition, June 13, 2022. The net sales were recorded in the consolidated condensed statements of comprehensive income (loss) for the three and nine months ended September 30, 2022, respectively. Earnings recorded in the consolidated condensed statements of comprehensive income (loss) for the three and nine months ended September 30, 2022 were not material. We also believe the proforma information is immaterial for disclosure for the three and nine months ended September 30, 2022 and 2021. Net sales and earnings for Biorez were immaterial to both the three and nine months ended September 30, 2022. We also believe the proforma information is immaterial for disclosure for the three and nine months ended September 30, 2022 and 2021. |
Revenues
Revenues | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | Revenues The following tables present revenue disaggregated by primary geographic market where the products are sold, by product line and timing of revenue recognition: Three Months Ended Three Months Ended September 30, 2022 September 30, 2021 Orthopedic Surgery General Surgery Total Orthopedic Surgery General Surgery Total Primary Geographic Markets United States $ 45,688 $ 110,033 $ 155,721 $ 37,957 $ 98,444 $ 136,401 Europe, Middle East & Africa 26,914 20,300 47,214 24,155 19,905 44,060 Asia Pacific 28,242 17,223 45,465 27,517 16,113 43,630 Americas (excluding the United States) 17,774 8,914 26,688 16,122 8,614 24,736 Total sales from contracts with customers $ 118,618 $ 156,470 $ 275,088 $ 105,751 $ 143,076 $ 248,827 Timing of Revenue Recognition Goods transferred at a point in time $ 108,875 $ 154,856 $ 263,731 $ 96,389 $ 141,798 $ 238,187 Services transferred over time 9,743 1,614 11,357 9,362 1,278 10,640 Total sales from contracts with customers $ 118,618 $ 156,470 $ 275,088 $ 105,751 $ 143,076 $ 248,827 Nine Months Ended Nine Months Ended September 30, 2022 September 30, 2021 Orthopedic Surgery General Surgery Total Orthopedic Surgery General Surgery Total Primary Geographic Markets United States $ 124,097 $ 312,034 $ 436,131 $ 115,864 $ 288,069 $ 403,933 Europe, Middle East & Africa 88,955 63,093 152,048 77,327 58,594 135,921 Asia Pacific 79,333 46,379 125,712 80,403 44,911 125,314 Americas (excluding the United States) 53,932 26,782 80,714 47,215 24,282 71,497 Total sales from contracts with customers $ 346,317 $ 448,288 $ 794,605 $ 320,809 $ 415,856 $ 736,665 Timing of Revenue Recognition Goods transferred at a point in time $ 317,140 $ 443,629 $ 760,769 $ 291,728 $ 412,298 $ 704,026 Services transferred over time 29,177 4,659 33,836 29,081 3,558 32,639 Total sales from contracts with customers $ 346,317 $ 448,288 $ 794,605 $ 320,809 $ 415,856 $ 736,665 Contract liability balances related to the sale of extended warranties to customers are as follows: September 30, 2022 December 31, 2021 Contract liability $ 17,551 $ 16,760 Revenue recognized during the nine months ended September 30, 2022 and September 30, 2021 from amounts included in contract liabilities at the beginning of the period were $9.5 million and $8.4 million, respectively. There were no material contract assets as of September 30, 2022 and December 31, 2021. |
Comprehensive Income (Loss)
Comprehensive Income (Loss) | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Comprehensive Income (Loss) | Comprehensive Income (Loss) Comprehensive income (loss) consists of the following: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Net income (loss) $ 46,150 $ 14,948 $ (107,166) $ 38,098 Other comprehensive income (loss): Cash flow hedging gain, net of income tax (income tax expense of $1,546 and $929 for the three months ended September 30, 2022 and 2021, respectively, and $3,384 and $2,568 for the nine months ended September 30, 2022 and 2021, respectively) 4,833 2,917 10,577 8,064 Pension liability, net of income tax (income tax expense of $157 and $201 for the three months ended September 30, 2022 and 2021, respectively, and $439 and $603 for the nine months ended September 30, 2022 and 2021, respectively) 490 631 1,502 1,893 Foreign currency translation adjustment (8,348) (4,740) (18,009) (5,813) Comprehensive income (loss) $ 43,125 $ 13,756 $ (113,096) $ 42,242 Accumulated other comprehensive loss consists of the following: Cash Flow Pension Cumulative Accumulated Balance, December 31, 2021 $ 3,656 $ (29,671) $ (28,188) $ (54,203) Other comprehensive income (loss) before reclassifications, net of tax 18,711 — (18,009) 702 Amounts reclassified from accumulated other comprehensive income (loss) before tax a (10,736) 1,941 — (8,795) Income tax 2,602 (439) — 2,163 Net current-period other comprehensive income (loss) 10,577 1,502 (18,009) (5,930) Balance, September 30, 2022 $ 14,233 $ (28,169) $ (46,197) $ (60,133) Cash Flow Pension Cumulative Accumulated Balance, December 31, 2020 $ (5,945) $ (36,620) $ (21,116) $ (63,681) Other comprehensive income (loss) before reclassifications, net of tax 5,141 — (5,813) (672) Amounts reclassified from accumulated other comprehensive income before tax a 3,854 2,496 — 6,350 Income tax (931) (603) — (1,534) Net current-period other comprehensive income (loss) 8,064 1,893 (5,813) 4,144 Balance, September 30, 2021 $ 2,119 $ (34,727) $ (26,929) $ (59,537) (a) The cash flow hedging gain (loss) and pension liability accumulated other comprehensive income (loss) components are included in sales or cost of sales and as a component of net periodic pension cost, respectively. Refer to Note 7 and Note 13, respectively, for further details. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments We enter into derivative instruments for risk management purposes only. We operate internationally and, in the normal course of business, are exposed to fluctuations in interest rates, foreign exchange rates and commodity prices. These fluctuations can increase the costs of financing, investing and operating the business. We use forward contracts, a type of derivative instrument, to manage certain foreign currency exposures. By nature, all financial instruments involve market and credit risks. We enter into forward contracts with major investment grade financial institutions and have policies to monitor the credit risk of those counterparties. While there can be no assurance, we do not anticipate any material non-performance by any of these counterparties. Foreign Currency Forward Contracts. We hedge forecasted intercompany sales denominated in foreign currencies through the use of forward contracts. We account for these forward contracts as cash flow hedges. To the extent these forward contracts meet hedge accounting criteria, changes in their fair value are not included in current earnings but are included in accumulated other comprehensive loss. These changes in fair value will be recognized into earnings as a component of sales or cost of sales when the forecasted transaction occurs. We also enter into forward contracts to exchange foreign currencies for United States dollars in order to hedge our currency transaction exposures on intercompany receivables designated in foreign currencies. These forward contracts settle each month at month-end, at which time we enter into new forward contracts. We have not designated these forward contracts as hedges and have not applied hedge accounting to them. The following table presents the notional contract amounts for forward contracts outstanding: As of FASB ASC Topic 815 Designation September 30, 2022 December 31, 2021 Forward exchange contracts Cash flow hedge $ 196,749 $ 172,894 Forward exchange contracts Non-designated 37,057 38,897 The remaining time to maturity as of September 30, 2022 is within two years for hedge designated foreign exchange contracts and approximately one month for non-hedge designated forward exchange contracts. Statement of comprehensive income (loss) presentation Derivatives designated as cash flow hedges Foreign exchange contracts designated as cash flow hedges had the following effects on accumulated other comprehensive income (loss) ("AOCI") and net earnings (loss) on our consolidated condensed statements of comprehensive income (loss) and our consolidated condensed balance sheets: Amount of Gain Recognized in AOCI Consolidated Condensed Statements of Comprehensive Income (Loss) Amount of Gain (Loss) Reclassified from AOCI Three Months Ended September 30, Total Amount of Line Item Presented Derivative Instrument 2022 2021 Location of amount reclassified 2022 2021 2022 2021 Foreign exchange contracts $ 11,695 $ 3,188 Net Sales $ 275,088 $ 248,827 $ 5,090 $ (1,077) Cost of Sales 123,473 106,521 225 419 Pre-tax gain (loss) $ 11,695 $ 3,188 $ 5,315 $ (658) Tax expense (benefit) 2,835 770 1,288 (159) Net gain (loss) $ 8,860 $ 2,418 $ 4,027 $ (499) Amount of Gain Recognized in AOCI Consolidated Condensed Statements of Comprehensive Income (Loss) Amount of Gain (Loss) Reclassified from AOCI Nine Months Ended September 30, Total Amount of Line Item Presented Derivative Instrument 2022 2021 Location of amount reclassified 2022 2021 2022 2021 Foreign exchange contracts $ 24,698 $ 6,778 Net Sales $ 794,605 $ 736,665 $ 10,237 $ (4,948) Cost of Sales 355,222 324,485 499 1,094 Pre-tax gain (loss) $ 24,698 $ 6,778 $ 10,736 $ (3,854) Tax expense (benefit) 5,987 1,637 2,602 (931) Net gain (loss) $ 18,711 $ 5,141 $ 8,134 $ (2,923) At September 30, 2022, $11.9 million of net unrealized gains on forward contracts accounted for as cash flow hedges, and included in accumulated other comprehensive loss, are expected to be recognized in earnings in the next twelve months. Derivatives not designated as cash flow hedges Net gains and losses from derivative instruments not accounted for as hedges and losses on our intercompany receivables on our consolidated condensed statements of comprehensive income (loss) were: Three Months Ended September 30, Nine Months Ended September 30, Derivative Instrument Location on Consolidated Condensed Statements of Comprehensive Income (Loss) 2022 2021 2022 2021 Net gain (loss) on currency forward contracts Selling and administrative expense $ 892 $ (48) $ 1,088 $ (398) Net loss on currency transaction exposures Selling and administrative expense $ (1,110) $ (441) $ (2,874) $ (1,320) Balance sheet presentation We record these forward foreign exchange contracts at fair value. The following tables summarize the fair value for forward foreign exchange contracts outstanding at September 30, 2022 and December 31, 2021: September 30, 2022 Location on Consolidated Condensed Balance Sheet Asset Fair Value Liabilities Fair Value Net Derivatives designated as hedged instruments: Foreign exchange contracts Prepaid expenses and other current assets $ 15,922 $ (172) $ 15,750 Foreign exchange contracts Other long-term assets 3,097 (59) 3,038 $ 19,019 $ (231) $ 18,788 Derivatives not designated as hedging instruments: Foreign exchange contracts Other current liabilities 53 (124) (71) Total derivatives $ 19,072 $ (355) $ 18,717 December 31, 2021 Location on Consolidated Condensed Balance Sheet Asset Fair Value Liabilities Fair Value Net Derivatives designated as hedged instruments: Foreign exchange contracts Prepaid expenses and other current assets $ 5,331 $ (430) $ 4,901 Foreign exchange contracts Other long-term liabilities 82 (161) (79) $ 5,413 $ (591) $ 4,822 Derivatives not designated as hedging instruments: Foreign exchange contracts Other current liabilities 38 (180) (142) Total derivatives $ 5,451 $ (771) $ 4,680 Our forward foreign exchange contracts are subject to a master netting agreement and qualify for netting in the consolidated condensed balance sheets. Fair Value Disclosure. FASB guidance defines fair value and establishes a framework for measuring fair value and related disclosure requirements. This guidance applies when fair value measurements are required or permitted. The guidance indicates, among other things, that a fair value measurement assumes that the transaction to sell an asset or transfer a liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability. Fair value is defined based upon an exit price model. Valuation Hierarchy. A valuation hierarchy was established for disclosure of the inputs to the valuations used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets in markets that are not active, inputs other than quoted prices that are observable for the asset or liability, including interest rates, yield curves and credit risks, or inputs that are derived principally from or corroborated by observable market data through correlation. Level 3 inputs are unobservable inputs based on our own assumptions used to measure assets and liabilities at fair value. A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. There have been no significant changes in the assumptions. Valuation Techniques. Assets and liabilities carried at fair value and measured on a recurring basis as of September 30, 2022 consist of forward foreign exchange contracts. The Company values its forward foreign exchange contracts using quoted prices for similar assets. The most significant assumption is quoted currency rates. The value of the forward foreign exchange contract assets and liabilities were valued using Level 2 inputs and are listed in the table above. The Company values contingent consideration using Level 3 inputs. These include pricing models, discounted cash flow methodologies, or similar techniques, and at least one significant model assumption or input that is unobservable. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consist of the following: September 30, December 31, Raw materials $ 111,431 $ 83,386 Work-in-process 26,967 17,449 Finished goods 166,415 130,809 Total $ 304,813 $ 231,644 |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Share | Earnings (Loss) Per Share Basic earnings (loss) per share (“basic EPS”) is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the reporting period. Diluted earnings (loss) per share (“diluted EPS”) gives effect to all dilutive potential shares. As the Company was in a net loss position for the nine months ended September 30, 2022, there were no dilutive potential shares included in the computation of diluted shares outstanding for the nine months ended September 30, 2022. The following table sets forth the computation of basic and diluted earnings (loss) per share for the three and nine months ended September 30, 2022 and 2021: Three Months Ended September 30, 2022 Three Months Ended September 30, 2021 Basic EPS Adjustments Diluted EPS Basic EPS Adjustments Diluted EPS Net income $ 46,150 — $ 46,150 $ 14,948 — $ 14,948 Weighted average shares outstanding 30,473 — 30,473 29,179 — 29,179 Employee stock compensation — 585 585 — 1,252 1,252 Warrants — — — — 468 468 Convertible notes — 45 45 — 1,244 1,244 30,473 630 31,103 29,179 2,964 32,143 EPS $ 1.51 $ 1.48 $ 0.51 $ 0.47 Nine Months Ended September 30, 2022 Nine Months Ended September 30, 2021 Basic EPS Adjustments Diluted EPS Basic EPS Adjustments Diluted EPS Net income (loss) $ (107,166) — $ (107,166) $ 38,098 — $ 38,098 Weighted average shares outstanding 29,892 — 29,892 29,097 — 29,097 Employee stock compensation — — — — 1,283 1,283 Warrants — — — — 427 427 Convertible notes — — — — 1,213 1,213 29,892 — 29,892 29,097 2,923 32,020 EPS $ (3.59) $ (3.59) $ 1.31 $ 1.19 The shares used in the calculation of diluted EPS exclude employee stock options and stock appreciation rights to purchase shares where the exercise price was greater than the average market price of common shares for the period and the effect of the inclusion would be anti-dilutive. Such shares aggregated approximately 2.0 million for the three months ended September 30, 2022 and 0.7 million and 0.5 million for the three and nine months ended September 30, 2021, respectively. As the Company was in a net loss position for the nine months ended September 30, 2022, there were no anti-dilutive shares. The 2.625% Notes and 2.250% convertible notes due in 2027 (the " 2.250% Notes"), more fully described in Note 11, are convertible under certain circumstances, as defined in the respective indentures for each series of notes, into a combination of cash and CONMED common stock. The following is intended to describe the impact of the 2.625% Notes and 2.250% Notes and related hedge transactions on the calculation of diluted EPS. Additional shares to be issued pursuant to the terms of the 2.625% Notes, the 2.250% Notes and related hedge transactions, if any, would occur at settlement. Effective with our adoption of ASU 2020-06 on January 1, 2022 (see Note 3), the Company began using the if-converted method to compute diluted EPS. Under the if-converted method, in the calculation of diluted EPS, the numerator is adjusted for interest expense applicable to the convertible notes (net of tax) and the denominator is adjusted to include additional common shares assuming the principal portion of the notes and the conversion premium are settled in common shares, when permitted or required. Under the if-converted method, when convertible notes require the principal to be paid in cash, then only the conversion premium affects the calculation of diluted EPS. On June 6, 2022, the Company repurchased and extinguished $275.0 million principal value of 2.625% Notes as further discussed in Note 11. Concurrently, the Company entered into a Supplemental Indenture related to the remaining $70.0 million in 2.625% Notes, pursuant to which the Company irrevocably elected to settle the principal value of the 2.625% Notes in cash. Similarly, the 2.250% Notes, issued on June 6, 2022, require the principal to be paid in cash. As a result, in periods in which the Company has net income, only the conversion premium will affect dilutive share count. Accordingly, for periods prior to adoption of ASU 2020-06 on January 1, 2022 and after June 6, 2022, in periods in which the Company has net income, the calculation of diluted EPS includes potential diluted shares upon conversion of the 2.625% Notes and the 2.250% Notes, only when the average market price per share of our common stock for the period is greater than the conversion price and only for the conversion premium, with the principal portion required to be settled in cash. We have entered into convertible notes hedge transactions to increase the effective conversion price of the 2.625% Notes from $88.80 to $114.92. However, our convertible notes hedges are not included when calculating potential dilutive shares since their effect is always anti-dilutive. Concurrent with entering into the hedge transactions, we entered into warrant transactions under which we agreed to sell shares of our common stock at $114.92. In periods in which the Company has net income, the calculation of diluted EPS includes potential diluted shares to be issued under the warrants when the average market price per share of our common stock for the period is greater than $114.92, calculated under the treasury stock method. On June 6, 2022, we entered into convertible notes hedge transactions to increase the effective conversion price of the 2.250% Notes from $145.33 to $251.53. However, our convertible notes hedges are not included when calculating potential dilutive shares since their effect is always anti-dilutive. Concurrent with entering into the hedge transactions, we entered into warrant transactions under which we agreed to sell shares of our common stock at $251.53. In periods in which the Company has net income, the calculation of diluted EPS includes potential diluted shares to be issued under the warrants when the average market price per share of our common stock for the period is greater than $251.53, calculated under the treasury stock method. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets The changes in the net carrying amount of goodwill for the nine months ended September 30, 2022 are as follows: Balance as of December 31, 2021 $ 617,528 Goodwill resulting from business acquisitions 198,992 Foreign currency translation (2,260) Balance as of September 30, 2022 $ 814,260 Assets and liabilities of acquired businesses are recorded at their estimated fair values as of the date of acquisition. Goodwill represents costs in excess of fair values assigned to the underlying net assets of acquired businesses. During the nine months ended September 30, 2022, the Company acquired In2Bones Global, Inc. and Biorez, Inc. as further described in Note 4. Goodwill resulting from the In2Bones Acquisition amounted to $139.8 million and acquired intangible assets including distributor relationships and developed technology amounted to $64.9 million. Goodwill resulting from the Biorez Acquisition amounted to $59.2 million and acquired intangible assets including developed technology and trademarks and tradenames amounted to $177.9 million. Other intangible assets consist of the following: September 30, 2022 December 31, 2021 Weighted Average Amortization Period (Years) Gross Accumulated Gross Accumulated Intangible assets with definite lives: 21 Customer and distributor relationships 24 $ 369,643 $ (166,190) $ 342,452 $ (152,934) Sales representation, marketing and promotional rights 25 149,376 (64,500) 149,376 (60,000) Developed technology 18 320,204 (32,368) 106,604 (26,495) Patents and other intangible assets 15 78,808 (52,064) 76,392 (50,890) Intangible assets with indefinite lives: Trademarks and tradenames 86,544 — 86,544 — $ 1,004,575 $ (315,122) $ 761,368 $ (290,319) Customer and distributor relationships, trademarks and tradenames, developed technology and patents and other intangible assets primarily represent allocations of purchase price to identifiable intangible assets of acquired businesses. Sales representation, marketing and promotional rights represent intangible assets created under our agreement with Musculoskeletal Transplant Foundation (“MTF”). Amortization expense related to intangible assets which are subject to amortization totaled $8.7 million and $8.3 million for the three months ended September 30, 2022 and 2021, respectively, and $24.9 million in both the nine months ended September 30, 2022 and 2021 and is included as a reduction of revenue (for amortization related to our sales representation, marketing and promotional rights) and in selling and administrative expense (for all other intangible assets) in the consolidated condensed statements of comprehensive income (loss). The estimated intangible asset amortization expense remaining for the year ending December 31, 2022 and for each of the five succeeding years is as follows: Amortization included in expense Amortization recorded as a reduction of revenue Total Remaining, 2022 $ 7,487 $ 1,500 $ 8,987 2023 29,263 6,000 35,263 2024 28,947 6,000 34,947 2025 29,423 6,000 35,423 2026 29,196 6,000 35,196 2027 30,235 6,000 36,235 |
Long Term Debt
Long Term Debt | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Long-term debt consists of the following: September 30, 2022 December 31, 2021 Revolving line of credit $ 53,000 $ 140,000 Term loan, net of deferred debt issuance costs of $781 and $1,373 in 2022 and 2021, respectively 133,807 226,196 2.625% convertible notes, net of deferred debt issuance costs of $531 and $3,700 in 2022 and 2021, respectively, and unamortized discount of $23,404 in 2021 69,469 317,896 2.250% convertible notes, net of deferred debt issuance costs of $19,898 in 2022 780,102 — Financing leases 297 564 Total debt 1,036,675 684,656 Less: Current portion 237 12,249 Total long-term debt $ 1,036,438 $ 672,407 Seventh Amended and Restated Senior Credit Agreement On July 16, 2021, we entered into a seventh amended and restated senior credit agreement consisting of: (a) a $233.5 million term loan facility and (b) a $585.0 million revolving credit facility. The revolving credit facility will terminate and the loans outstanding under the term loan facility will expire on July 16, 2026. The term loan was payable in quarterly installments increasing over the term of the facility. During the nine months ended September 30, 2022 we made a $90.0 million prepayment on the term loan facility resulting in the elimination of such quarterly payments with the remaining balance due upon the expiration of the term loan facility. The $90.0 million prepayment was accounted for as an extinguishment and resulted in a write-off to other expense of unamortized debt issuance costs of $0.5 million. Proceeds from the term loan facility and borrowings under the revolving credit facility were used to repay the then existing senior credit agreement. Interest rates are at LIBOR (3.125% at September 30, 2022) plus an interest rate margin of 1.125% (4.250% at September 30, 2022). For borrowings where we elect to use the alternate base rate, the initial base rate is the greatest of (i) the Prime Rate, (ii) the Federal Funds Rate plus 0.50% or (iii) the one-month Adjusted LIBOR plus 1.00%, plus, in each case, an interest rate margin. There were $134.6 million in borrowings outstanding on the term loan facility as of September 30, 2022. There were $53.0 million in borrowings outstanding under the revolving credit facility as of September 30, 2022. Our available borrowings on the revolving credit facility at September 30, 2022 were $530.2 million with approximately $1.8 million of the facility set aside for outstanding letters of credit. The seventh amended and restated senior credit agreement is collateralized by substantially all of our personal property and assets. The seventh amended and restated senior credit agreement contains covenants and restrictions which, among other things, require the maintenance of certain financial ratios and restrict dividend payments and the incurrence of certain indebtedness and other activities, including acquisitions and dispositions. We were in full compliance with these covenants and restrictions as of September 30, 2022. We are also required, under certain circumstances, to make mandatory prepayments from net cash proceeds from any issuance of equity and asset sales. 2.625% Convertible Notes On January 29, 2019, we issued $345.0 million in 2.625% convertible notes due in 2024 (the "2.625% Notes"). Interest is payable semi-annually in arrears on February 1 and August 1 of each year, commencing August 1, 2019. The 2.625% Notes will mature on February 1, 2024, unless earlier repurchased or converted. The 2.625% Notes represent subordinated unsecured obligations and are convertible under certain circumstances, as defined in the indenture, into a combination of cash and CONMED common stock. The 2.625% Notes may be converted at an initial conversion rate of 11.2608 shares of our common stock per $1,000 principal amount of 2.625% Notes (equivalent to an initial conversion price of approximately $88.80 per share of common stock). Holders of the 2.625% Notes may convert the 2.625% Notes at their option at any time on or after November 1, 2023 through the second scheduled trading day preceding the maturity date. Holders of the 2.625% Notes will also have the right to convert the 2.625% Notes prior to November 1, 2023, but only upon the occurrence of specified events. The conversion rate is subject to anti-dilution adjustments if certain events occur. A portion of the net proceeds from the offering of the 2.625% Notes were used as part of the financing for the Buffalo Filter acquisition and $21.0 million were used to pay the cost of certain convertible notes hedge transactions as further described below. On June 6, 2022, the Company repurchased and extinguished $275.0 million principal amount of the 2.625% Notes for aggregate consideration consisting of $275.0 million in cash and approximately 0.9 million shares of the Company's common stock. During the nine months ended September 30, 2022, the Company recorded a loss on extinguishment of $103.1 million to other expense based on the fair value of the shares of the Company’s common stock issued in connection with the extinguishment. This loss was not deductible for tax purposes. We also recorded a write-off to other expense of unamortized debt issuance costs related to the 2.625% Notes of $2.9 million. Concurrently, the Company entered into a Supplemental Indenture related to the remaining $70.0 million in 2.625% Notes, in which the Company irrevocably elected to settle the principal value of those 2.625% Notes in cash. Our effective borrowing rate for nonconvertible debt at the time of issuance of the 2.625% Notes was estimated to be 6.14%, which resulted in $51.6 million of the $345.0 million aggregate principal amount of Notes issued, or $39.1 million after taxes, being attributable to equity. For the three and nine months ended September 30, 2021, we recorded interest expense related to the amortization of debt discount on the 2.625% Notes of $2.6 million and $7.6 million, respectively, at the effective interest rate of 6.14%. On January 1, 2022, we adopted ASU 2020-06 using the modified retrospective approach as further described in Note 3. This ASU eliminated the equity component separately recorded for the conversion features associated with the convertible notes and related debt discount. For the three months ended September 30, 2022 and 2021, we have recorded interest expense on the 2.625% Notes of $0.5 million and $2.3 million, respectively, and for the nine months ended September 30, 2022 and 2021 we have recorded interest expense on the 2.625% Notes of $4.4 million and $6.8 million, respectively, at the contractual coupon rate of 2.625%. The estimated fair value of the 2.625% Notes was approximately $77.1 million as of September 30, 2022 based on a market approach which represents a Level 2 valuation in the fair value hierarchy. The estimated fair value was determined based on the estimated or actual bids and offers of the 2.625% Notes in an over-the-counter market transaction on the last business day of the period. 2.250% Convertible Notes On June 6, 2022, we issued $800.0 million in 2.250% Notes. Interest is payable semi-annually in arrears on June 15 and December 15 of each year, commencing December 15, 2022. The 2.250% Notes will mature on June 15, 2027, unless earlier repurchased or converted. The 2.250% Notes represent subordinated unsecured obligations and are convertible under certain circumstances, as defined in the indenture, into a combination of cash and CONMED common stock, with the principal required to be paid in cash. The 2.250% Notes may be converted at an initial conversion rate of 6.8810 shares of our common stock per $1,000 principal amount of the 2.250% Notes (equivalent to an initial conversion price of approximately $145.33 per share of common stock). Holders of the 2.250% Notes may convert the 2.250% Notes at their option at any time on or after March 15, 2027 through the second scheduled trading day preceding the maturity date. Holders of the 2.250% Notes will also have the right to convert the 2.250% Notes prior to March 15, 2027, but only upon the occurrence of specified events. The conversion rate is subject to anti-dilution adjustments if certain events occur. A portion of these proceeds were used to repurchase and extinguish a portion of the 2.625% Notes, pay off our then outstanding balance on our revolving line of credit, pay down of $90.0 million of our term loan and partially pay for the In2Bones Acquisition. In addition, approximately $115.6 million of the proceeds were used to pay the cost of certain convertible notes hedge transactions related to the 2.250% Notes. For the three and nine months ended September 30, 2022, we have recorded interest expense on the 2.250% Notes of $4.5 million and $5.8 million, respectively, at the contractual coupon rate of 2.250%. The estimated fair value of the 2.250% Notes was approximately $690.3 million as of September 30, 2022 based on a market approach which represents a Level 2 valuation in the fair value hierarchy. The estimated fair value was determined based on the estimated or actual bids and offers of the 2.250% Notes in an over-the-counter market transaction on the last business day of the period. Convertible Notes Hedge Transactions In connection with the offering of the 2.625% and 2.250% Notes, we entered into convertible notes hedge transactions with a number of financial institutions (each, an “option counterparty”). The convertible notes hedge transactions cover, subject to anti-dilution adjustments substantially similar to those applicable to the respective Notes, the number of shares of our common stock underlying the 2.625% and 2.250% Notes. Concurrent with entering into the convertible notes hedge transactions, we also entered into separate warrant transactions with each option counterparty whereby we sold to such option counterparty warrants to purchase, subject to customary anti-dilution adjustments, the same number of shares of our common stock. In connection with the repurchase and extinguishment of $275.0 million principal amount of the 2.625% Notes, the Company entered into agreements with the option counterparties to terminate a corresponding portion of the hedges on the 2.625% Notes. The transactions had a net fair value due the Company on execution date of $22.2 million which was recorded as an adjustment to Paid-in Capital. The Company recorded a $5.5 million charge to other expense as a result of a subsequent decline in fair value between execution date and settlement date with the Company receiving net cash of $16.7 million. The termination of the convertible notes hedge resulted in the release of the related deferred tax asset. In connection with the issuance of 2.250% Notes, the Company purchased hedges for $187.6 million ($142.1 million net of tax) and received proceeds from the issuance of warrants totaling $72.0 million, recorded to paid-in capital. The convertible notes hedge transactions are expected generally to reduce the potential dilution upon conversion of the Notes and/or offset any cash payments we are required to make in excess of the principal amount of converted Notes, as the case may be, in the event that the market price per share of our common stock, as measured under the terms of the convertible note hedge transactions, is greater than the strike price of the convertible notes hedge transactions, which initially corresponds to the conversion price of the Notes and is subject to anti-dilution adjustments substantially similar to those applicable to the conversion rate of the Notes. If, however, the market price per share of our common stock, as measured under the terms of the warrant transactions, exceeds the strike price ($114.92 for the 2.625% Notes and $251.53 for the 2.250% Notes) of the warrants, there would nevertheless be dilution to the extent that such market price exceeds the strike price of the warrants as noted in Note 9, unless we elect to settle the warrants in cash. The scheduled maturities of long-term debt outstanding at September 30, 2022 are as follows: Remaining 2022 $ — 2023 — 2024 70,000 2025 — 2026 187,588 2027 800,000 The above amounts exclude deferred debt issuance costs and financing leases. |
Guarantees
Guarantees | 9 Months Ended |
Sep. 30, 2022 | |
Guarantees [Abstract] | |
Guarantees | Guarantees We provide warranties on certain of our products at the time of sale and sell extended warranties. The standard warranty period for our capital equipment is generally one year and our extended warranties typically vary from one to three years. Liability under service and warranty policies is based upon a review of historical warranty and service claim experience. Adjustments are made to accruals as claim data and historical experience warrant. Changes in the liability for standard warranties for the nine months ended September 30, are as follows: 2022 2021 Balance as of January 1, $ 2,344 $ 1,826 Provision for warranties 297 1,235 Claims made (624) (683) Balance as of September 30, $ 2,017 $ 2,378 Costs associated with extended warranty repairs are recorded as incurred and amounted to $4.6 million and $5.2 million for the nine months ended September 30, 2022 and 2021, respectively. |
Pension Plan
Pension Plan | 9 Months Ended |
Sep. 30, 2022 | |
Retirement Benefits [Abstract] | |
Pension Plan | Pension Plan Net periodic pension cost consists of the following: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Service cost $ 269 $ 248 $ 807 $ 744 Interest cost on projected benefit obligation 537 451 1,611 1,353 Expected return on plan assets (1,324) (1,289) (3,972) (3,867) Net amortization and deferral 647 832 1,941 2,496 Net periodic pension cost $ 129 $ 242 $ 387 $ 726 |
Acquisition and Other Expense
Acquisition and Other Expense | 9 Months Ended |
Sep. 30, 2022 | |
Acquisition and Other Expense [Abstract] | |
Acquisition and Other Expense | Acquisition and Other Expense Acquisition and other expense consists of the following: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Acquisition costs included in cost of sales $ 2,096 $ — $ 2,445 $ — Acquisition costs $ 3,706 $ — $ 6,306 $ — Legal matters — — 775 — Restructuring and related costs — — — 414 Acquisition and other costs included in selling and administrative expense $ 3,706 $ — $ 7,081 $ 414 Convertible notes premium on extinguishment $ — $ — $ 103,125 $ — Change in fair value of convertible notes hedges upon settlement — — 5,460 — Loss on early extinguishment of debt — 1,127 3,426 1,127 Debt related costs included in other expense $ — $ 1,127 $ 112,011 $ 1,127 During the three and nine months ended September 30, 2022 we recognized $2.1 million and $2.4 million, respectively, in costs for inventory step-up adjustments associated with the In2Bones Acquisition, as further described in Note 4. During the three and nine months ended September 30, 2022 we recognized $3.7 million and $6.3 million, respectively, in consulting fees, legal fees and other integration related costs associated with the acquisitions of In2Bones and Biorez, as further described in Note 4. These costs were included in selling and administrative expense. During the nine months ended September 30, 2022, we recognized $0.8 million in costs related to the settlement of litigation. These costs were included in selling and administrative expense. During the nine months ended September 30, 2021 we recorded a charge of $0.4 million related to the restructuring of our sales force which consisted primarily of termination payments to Orthopedic distributors made in exchange for ongoing assistance to transition to employee-based sales representatives and severance. These costs were charged to selling and administrative expense. During the nine months ended September 30, 2022, we recorded expense of $103.1 million related to the conversion premium on the repurchase and extinguishment of $275.0 million of the 2.625% Notes, $5.5 million related to the settlement of the associated convertible notes hedge transactions and $3.4 million related to the write-off of deferred financing fees associated with the repurchase and extinguishment of $275.0 million of the 2.625% Notes and the pay down of $90.0 million on our term loan. These costs were recorded in other expense as further discussed in Note 11. During the three and nine months ended ended September 30, 2021, we recorded $1.1 million related to a loss on early extinguishment and third party fees associated with the seventh amended and restated senior credit agreement. These costs were included in other expense. |
Business Segment
Business Segment | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Business Segment | Business Segment We are accounting and reporting for our business as a single operating segment entity engaged in the development, manufacturing and sale on a global basis of surgical devices and related equipment. Our chief operating decision maker (the CEO) evaluates the various global product portfolios on a net sales basis and evaluates profitability, investment, cash flow metrics and allocates resources on a consolidated worldwide basis due to shared infrastructure and resources. Our product lines consist of orthopedic surgery and general surgery. Orthopedic surgery consists of sports medicine instrumentation and small bone, large bone and specialty powered surgical instruments as well as imaging systems for use in minimally invasive surgery procedures and fees related to the sales representation, promotion and marketing of sports medicine allograft tissue. General surgery consists of a complete line of endo-mechanical instrumentation for minimally invasive laparoscopic and gastrointestinal procedures, smoke evacuation devices, a line of cardiac monitoring products as well as electrosurgical generators and related instruments. These product lines' net sales are as follows: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Orthopedic surgery $ 118,618 $ 105,751 $ 346,317 $ 320,809 General surgery 156,470 143,076 448,288 415,856 Consolidated net sales $ 275,088 $ 248,827 $ 794,605 $ 736,665 |
Legal Proceedings
Legal Proceedings | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Proceedings | Legal Proceedings From time to time, the Company may receive an information request, subpoena or warrant from a government agency such as the Securities and Exchange Commission, Department of Justice, Equal Employment Opportunity Commission, the Occupational Safety and Health Administration, the United States Food and Drug Administration, the Department of Labor, the Treasury Department or other federal and state agencies or foreign governments or government agencies. These information requests, subpoenas or warrants may or may not be routine inquiries, or may begin as routine inquiries and over time develop into enforcement actions of various types. Likewise, if we receive reports of alleged misconduct from employees and third parties, we investigate as appropriate. Manufacturers of medical devices have been the subject of various enforcement actions relating to interactions with health care providers domestically or internationally whereby companies are claimed to have provided health care providers with inappropriate incentives to purchase their products. Similarly, the Foreign Corrupt Practices Act ("FCPA") imposes obligations on manufacturers with respect to interactions with health care providers who may be considered government officials based on their affiliation with public hospitals. The FCPA also requires publicly listed manufacturers to maintain accurate books and records, and maintain internal accounting controls sufficient to provide assurance that transactions are accurately recorded, lawful and in accordance with management's authorization. The FCPA poses unique challenges both because manufacturers operate in foreign cultures in which conduct illegal under the FCPA may not be illegal in local jurisdictions, and because, in some cases, a United States manufacturer may face risks under the FCPA based on the conduct of third parties over whom the manufacturer may not have complete control. While CONMED has not experienced any material enforcement action to date, there can be no assurance that the Company will not be subject to a material enforcement action in the future, or that the Company will not incur costs including, in the form of fees for lawyers and other consultants, that are material to the Company’s results of operations in the course of responding to a future inquiry or investigation. Manufacturers of medical products may face exposure to significant product liability claims, as well as patent infringement and other claims incurred in the ordinary course of business. To date, we have not experienced any claims that have been material to our financial statements or financial condition, but any such claims arising in the future could have a material adverse effect on our business, results of operations or cash flows. We currently maintain commercial product liability insurance of $35 million per incident and $35 million in the aggregate annually, which we believe is adequate. This coverage is on a claims-made basis. There can be no assurance that claims will not exceed insurance coverage, that the carriers will be solvent or that such insurance will be available to us in the future at a reasonable cost. Our operations are subject, and in the past have been subject, to a number of environmental laws and regulations governing, among other things, air emissions; wastewater discharges; the use, handling and disposal of hazardous substances and wastes; soil and groundwater remediation and employee health and safety. Likewise, the operations of our suppliers and sterilizers are subject to similar environmental laws and regulations. In some jurisdictions, environmental requirements may be expected to become more stringent in the future. In the United States, certain environmental laws can impose liability for the entire cost of site restoration upon each of the parties that may have contributed to conditions at the site regardless of fault or the lawfulness of the party’s activities. While we do not believe that the present costs of environmental compliance and remediation are material, there can be no assurance that future compliance or remedial obligations would not have a material adverse effect on our financial condition, results of operations or cash flows. In 2014, the Company acquired EndoDynamix, Inc. The agreement governing the terms of the acquisition provides that, if various conditions are met, certain contingent payments relating to the first commercial sale of the products (the milestone payment), as well as royalties based on sales (the revenue based payments), are due to the seller. In 2016, we notified the seller that there was a need to redesign the product, and that, as a consequence, the first commercial sale had been delayed. Consequently, the payment of contingent milestone and revenue-based payments were delayed. On January 18, 2017, the seller provided notice (the "Notice") seeking $12.7 million under a liquidated damages clause, which essentially represented the seller's view as to the sum of the projected contingent milestone and revenue-based payments on an accelerated basis. CONMED responded to the Notice denying that there was any basis for acceleration of the payments due under the acquisition agreement. On February 22, 2017, the representative of the former shareholders of EndoDynamix filed a complaint in Delaware Chancery Court claiming breach of contract with respect to the duty to commercialize the product and seeking the contingent payments on an accelerated basis. In the third quarter of 2018, the Company decided to halt the development of the EndoDynamix clip applier and recorded a charge to write off assets and released a previously accrued contingent consideration liability. In court filings the Plaintiffs claim to seek liquidated damages, as well as additional damages up to $24.8 million. A non-jury trial in the Delaware Chancery Court commenced on March 18, 2021, and testimony concluded on April 7, 2021. On June 30, 2022, the Court issued a ruling that CONMED had presented overwhelming evidence that it had not breached its obligations under the acquisition agreement, and that CONMED was entitled to judgement on all claims asserted against it. The Company had not recorded any expense related to potential damages in connection with this matter and the period within which the former shareholders of EndoDynamix could have appealed expired without any appeal being filed. CONMED is defending two Georgia State Court actions. The first action was filed in Cobb County by various employees, former employees, contract workers and others against CONMED and against a contract sterilizer (the "Cobb County Action"). The second action was filed in Douglas County against CONMED’s landlord and other allegedly related entities (the "Douglas County Action"). Plaintiffs in the lawsuits allege personal injury and related claims purportedly arising from or relating to exposure to Ethylene Oxide, a chemical used to sterilize certain products. CONMED is defending the claims asserted directly against it and is providing indemnification for certain other defendants for these claims based on contractual provisions. Both actions are in their early stages. The Company's motion to dismiss in the Cobb County action was heard on January 10, 2022, and the Court issued a ruling on June 15, 2022 dismissing 44 of the 53 plaintiffs' claims as precluded by the exclusive workers' compensation remedy, as well as one claim from a non-employee plaintiff. As to the remaining claims that were not the subject of the motion to dismiss, CONMED believes it has strong defenses and will vigorously defend itself and all parties it is indemnifying. As with any litigation, there are risks, including the risk that CONMED may not prevail with respect to the defense of the underlying claims, or with respect to securing adequate insurance coverage for the indemnification claims. The Company is unable to estimate any range of possible loss at this time, and has not recorded any expense related to potential damages in connection with this matter because the Company does not believe any potential loss is probable. CONMED has submitted the foregoing claims for insurance coverage. One insurer is providing coverage for certain of the claims asserted directly against the Company. CONMED is currently litigating two lawsuits in the United States District Court for the Northern District of New York with Federal Insurance Company (“Chubb”): one involving CONMED’s claim for coverage for the indemnification claims arising from the Cobb County Action, and the other concerning CONMED’s claim for coverage for the indemnification claims arising from the Douglas County Action. On March 10, 2022, the Court ruled in favor of CONMED with respect to coverage for the indemnification claims arising from the Cobb County Action. Chubb's motion for reconsideration was denied, and Chubb filed a notice of appeal. On August 9, 2022, CONMED won a similar ruling finding in its favor and against Chubb as to the coverage case concerning the Douglas County Action. Chubb has appealed that decision as well. CONMED believes its position is well-grounded in the facts and the law, but there can be no assurance that CONMED will prevail in either of the two coverage cases. In addition, one of CONMED’s contract sterilizers, which is defending toxic tort claims asserted by various residents in the areas around its processing facility, has placed CONMED on notice of a claim for indemnification relating to some of those claims. CONMED is reviewing the notice, and has not at this time taken any position on the notice. From time to time, we are also subject to negligence and other claims arising out of the ordinary conduct of our business, including, for example, accidents our employees may experience within the course of their employment or otherwise. We are currently defending one such claim, which we expect to be fully covered by insurance, involving potentially significant personal injuries. The Company is unable to estimate any range of possible loss at this time, and therefore has not recorded any liability related to potential damages in connection with this matter. We record reserves sufficient to cover probable and estimable losses associated with any such pending claims. We do not expect that the resolution of any pending claims, investigations or reports of alleged misconduct will have a material adverse effect on our financial condition, results of operations or cash flows. There can be no assurance, however, that future claims or investigations, or the costs associated with responding to such claims, investigations or reports of misconduct, especially claims and investigations not covered by insurance, will not have a material adverse effect on our financial condition, results of operations or cash flows. |
Interim Reporting (Policies)
Interim Reporting (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Use of Estimates | Use of Estimates Preparation of the consolidated condensed financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated condensed financial statements and the reported amounts of revenue and expenses during the reporting period. |
New Accounting Pronouncements (
New Accounting Pronouncements (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements Recently Adopted Accounting Standards In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity ("ASU 2020-06"), which simplifies the accounting for convertible instruments by removing certain separation models requiring separate accounting for embedded conversion features which will result in more convertible debt instruments accounted for as a single liability. The ASU eliminates certain settlement conditions that are required for equity classification to qualify for the derivative scope exception. The ASU addresses how convertible instruments are accounted for in the calculation of diluted earnings per share by using the if-converted method. The ASU is effective for fiscal years beginning after December 15, 2021, with early adoption permitted no earlier than fiscal years beginning after December 15, 2020. The Company adopted this standard on January 1, 2022 using the modified retrospective method. The adoption of this new guidance resulted in: • an increase of approximately $22.6 million to long-term debt in the consolidated condensed balance sheets, to reflect the full principal amount of the convertible notes then outstanding net of issuance costs (the "2.625% Notes" described more fully in Note 11); • a reduction of approximately $37.9 million to additional paid-in capital, net of income tax effects, to remove the equity component separately recorded for the conversion features associated with the 2.625% Notes; • a decrease to deferred income tax liabilities of approximately $5.5 million, and • a cumulative-effect adjustment of approximately $20.8 million, net of income tax effects, to the beginning balance of retained earnings as of January 1, 2022. The adoption of this new guidance reduced interest expense related to amortization of debt discount on the 2.625% Notes by approximately $2.6 million during the three months ended March 31, 2022. Additionally, the dilutive share count increased by approximately 2.5 million shares as a result of calculating the impact of dilution from the 2.625% Notes using the if-converted method. During the nine months ended September 30, 2022, the Company repurchased and extinguished $275.0 million principal value of the 2.625% Notes as further discussed in Note 11. Concurrently, the Company entered into a Supplemental Indenture related to the remaining $70.0 million in 2.625% Notes, pursuant to which the Company irrevocably elected to settle the principal value of those 2.625% Notes in cash. As a result, in periods in which the Company has net income, only the conversion premium will affect the dilutive share count. During the three months ended September 30, 2022, our average share price exceeded the conversion price of the 2.625% Notes and we included such shares assumed to be issued if the Notes were converted in our diluted share count. Refer to Note 9 for further details. As the Company was in a net loss position for the nine months ended September 30, 2022, there were no dilutive potential shares included in the computation of diluted shares outstanding for the nine months ended September 30, 2022. Recently Issued Accounting Standards, Not Yet Adopted In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional guidance if certain criteria are met for entities that have contracts, hedging relationships, and other transactions that reference LIBOR or other reference rates expected to be discontinued as a result of reference rate reform. This ASU is effective as of March 12, 2020 through December 31, 2022. The Company has not adopted this ASU as of September 30, 2022. Our seventh amended and restated senior credit agreement includes language to address the change from LIBOR to an alternative base rate, therefore we do not believe reference rate reform will have a significant impact on our consolidated financial statements, however will continue to monitor our transition away from LIBOR and the potential to elect to apply this guidance in our consolidated financial statements in the event that we are impacted by reference rate reform. |
Business Combinations (Tables)
Business Combinations (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the estimated fair values of the assets acquired and liabilities assumed as a result of the In2Bones and Biorez Acquisitions that were accounted for as business combinations. The assessment of fair value is based on preliminary valuations and estimates that were available to management at the time the consolidated condensed financial statements were prepared. Accordingly, the allocation of purchase price is preliminary and therefore subject to adjustment during the measurement adjustment period. In2Bones Biorez Cash $ 445 $ 742 Accounts receivable, net 5,036 318 Inventories 24,247 61 Prepaid expenses and other current assets 403 118 Current assets 30,131 1,239 Goodwill 139,816 59,176 Developed technology 37,300 176,300 Distributor relationships 27,600 — Trademarks and tradenames — 1,600 Other long-term assets 2,875 112 Total assets acquired $ 237,722 $ 238,427 Current liabilities assumed 5,972 1,441 Deferred income taxes 16,699 36,621 Contingent consideration 69,402 114,512 Other long-term liabilities 466 — Total liabilities assumed $ 92,539 $ 152,574 Net assets acquired $ 145,183 $ 85,853 |
Fair Value Measurement Inputs and Valuation Techniques | The recurring Level 3 fair value measurements of contingent consideration for which the liability is recorded include the following significant unobservable inputs: Assumptions Unobservable Input In2Bones Biorez Discount rate 5.67% 10.34% Revenue volatility 12.75% 18.87% Projected year of payment 2023-2026 2023-2026 |
Revenues (Tables)
Revenues (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following tables present revenue disaggregated by primary geographic market where the products are sold, by product line and timing of revenue recognition: Three Months Ended Three Months Ended September 30, 2022 September 30, 2021 Orthopedic Surgery General Surgery Total Orthopedic Surgery General Surgery Total Primary Geographic Markets United States $ 45,688 $ 110,033 $ 155,721 $ 37,957 $ 98,444 $ 136,401 Europe, Middle East & Africa 26,914 20,300 47,214 24,155 19,905 44,060 Asia Pacific 28,242 17,223 45,465 27,517 16,113 43,630 Americas (excluding the United States) 17,774 8,914 26,688 16,122 8,614 24,736 Total sales from contracts with customers $ 118,618 $ 156,470 $ 275,088 $ 105,751 $ 143,076 $ 248,827 Timing of Revenue Recognition Goods transferred at a point in time $ 108,875 $ 154,856 $ 263,731 $ 96,389 $ 141,798 $ 238,187 Services transferred over time 9,743 1,614 11,357 9,362 1,278 10,640 Total sales from contracts with customers $ 118,618 $ 156,470 $ 275,088 $ 105,751 $ 143,076 $ 248,827 Nine Months Ended Nine Months Ended September 30, 2022 September 30, 2021 Orthopedic Surgery General Surgery Total Orthopedic Surgery General Surgery Total Primary Geographic Markets United States $ 124,097 $ 312,034 $ 436,131 $ 115,864 $ 288,069 $ 403,933 Europe, Middle East & Africa 88,955 63,093 152,048 77,327 58,594 135,921 Asia Pacific 79,333 46,379 125,712 80,403 44,911 125,314 Americas (excluding the United States) 53,932 26,782 80,714 47,215 24,282 71,497 Total sales from contracts with customers $ 346,317 $ 448,288 $ 794,605 $ 320,809 $ 415,856 $ 736,665 Timing of Revenue Recognition Goods transferred at a point in time $ 317,140 $ 443,629 $ 760,769 $ 291,728 $ 412,298 $ 704,026 Services transferred over time 29,177 4,659 33,836 29,081 3,558 32,639 Total sales from contracts with customers $ 346,317 $ 448,288 $ 794,605 $ 320,809 $ 415,856 $ 736,665 |
Contract with Customer, Asset and Liability | Contract liability balances related to the sale of extended warranties to customers are as follows: September 30, 2022 December 31, 2021 Contract liability $ 17,551 $ 16,760 |
Comprehensive Income (Loss) (Ta
Comprehensive Income (Loss) (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Schedule of Comprehensive Income (Loss) | Comprehensive income (loss) consists of the following: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Net income (loss) $ 46,150 $ 14,948 $ (107,166) $ 38,098 Other comprehensive income (loss): Cash flow hedging gain, net of income tax (income tax expense of $1,546 and $929 for the three months ended September 30, 2022 and 2021, respectively, and $3,384 and $2,568 for the nine months ended September 30, 2022 and 2021, respectively) 4,833 2,917 10,577 8,064 Pension liability, net of income tax (income tax expense of $157 and $201 for the three months ended September 30, 2022 and 2021, respectively, and $439 and $603 for the nine months ended September 30, 2022 and 2021, respectively) 490 631 1,502 1,893 Foreign currency translation adjustment (8,348) (4,740) (18,009) (5,813) Comprehensive income (loss) $ 43,125 $ 13,756 $ (113,096) $ 42,242 |
Schedule of Accumulated Other Comprehensive Loss | Accumulated other comprehensive loss consists of the following: Cash Flow Pension Cumulative Accumulated Balance, December 31, 2021 $ 3,656 $ (29,671) $ (28,188) $ (54,203) Other comprehensive income (loss) before reclassifications, net of tax 18,711 — (18,009) 702 Amounts reclassified from accumulated other comprehensive income (loss) before tax a (10,736) 1,941 — (8,795) Income tax 2,602 (439) — 2,163 Net current-period other comprehensive income (loss) 10,577 1,502 (18,009) (5,930) Balance, September 30, 2022 $ 14,233 $ (28,169) $ (46,197) $ (60,133) Cash Flow Pension Cumulative Accumulated Balance, December 31, 2020 $ (5,945) $ (36,620) $ (21,116) $ (63,681) Other comprehensive income (loss) before reclassifications, net of tax 5,141 — (5,813) (672) Amounts reclassified from accumulated other comprehensive income before tax a 3,854 2,496 — 6,350 Income tax (931) (603) — (1,534) Net current-period other comprehensive income (loss) 8,064 1,893 (5,813) 4,144 Balance, September 30, 2021 $ 2,119 $ (34,727) $ (26,929) $ (59,537) (a) The cash flow hedging gain (loss) and pension liability accumulated other comprehensive income (loss) components are included in sales or cost of sales and as a component of net periodic pension cost, respectively. Refer to Note 7 and Note 13, respectively, for further details. |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Notional Amounts of Outstanding Derivative Positions | The following table presents the notional contract amounts for forward contracts outstanding: As of FASB ASC Topic 815 Designation September 30, 2022 December 31, 2021 Forward exchange contracts Cash flow hedge $ 196,749 $ 172,894 Forward exchange contracts Non-designated 37,057 38,897 |
Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss) | Foreign exchange contracts designated as cash flow hedges had the following effects on accumulated other comprehensive income (loss) ("AOCI") and net earnings (loss) on our consolidated condensed statements of comprehensive income (loss) and our consolidated condensed balance sheets: Amount of Gain Recognized in AOCI Consolidated Condensed Statements of Comprehensive Income (Loss) Amount of Gain (Loss) Reclassified from AOCI Three Months Ended September 30, Total Amount of Line Item Presented Derivative Instrument 2022 2021 Location of amount reclassified 2022 2021 2022 2021 Foreign exchange contracts $ 11,695 $ 3,188 Net Sales $ 275,088 $ 248,827 $ 5,090 $ (1,077) Cost of Sales 123,473 106,521 225 419 Pre-tax gain (loss) $ 11,695 $ 3,188 $ 5,315 $ (658) Tax expense (benefit) 2,835 770 1,288 (159) Net gain (loss) $ 8,860 $ 2,418 $ 4,027 $ (499) Amount of Gain Recognized in AOCI Consolidated Condensed Statements of Comprehensive Income (Loss) Amount of Gain (Loss) Reclassified from AOCI Nine Months Ended September 30, Total Amount of Line Item Presented Derivative Instrument 2022 2021 Location of amount reclassified 2022 2021 2022 2021 Foreign exchange contracts $ 24,698 $ 6,778 Net Sales $ 794,605 $ 736,665 $ 10,237 $ (4,948) Cost of Sales 355,222 324,485 499 1,094 Pre-tax gain (loss) $ 24,698 $ 6,778 $ 10,736 $ (3,854) Tax expense (benefit) 5,987 1,637 2,602 (931) Net gain (loss) $ 18,711 $ 5,141 $ 8,134 $ (2,923) |
Derivatives Not Designated as Hedging Instruments | Net gains and losses from derivative instruments not accounted for as hedges and losses on our intercompany receivables on our consolidated condensed statements of comprehensive income (loss) were: Three Months Ended September 30, Nine Months Ended September 30, Derivative Instrument Location on Consolidated Condensed Statements of Comprehensive Income (Loss) 2022 2021 2022 2021 Net gain (loss) on currency forward contracts Selling and administrative expense $ 892 $ (48) $ 1,088 $ (398) Net loss on currency transaction exposures Selling and administrative expense $ (1,110) $ (441) $ (2,874) $ (1,320) |
Schedule of Fair Value for Forward Foreign Exchange Contracts | The following tables summarize the fair value for forward foreign exchange contracts outstanding at September 30, 2022 and December 31, 2021: September 30, 2022 Location on Consolidated Condensed Balance Sheet Asset Fair Value Liabilities Fair Value Net Derivatives designated as hedged instruments: Foreign exchange contracts Prepaid expenses and other current assets $ 15,922 $ (172) $ 15,750 Foreign exchange contracts Other long-term assets 3,097 (59) 3,038 $ 19,019 $ (231) $ 18,788 Derivatives not designated as hedging instruments: Foreign exchange contracts Other current liabilities 53 (124) (71) Total derivatives $ 19,072 $ (355) $ 18,717 December 31, 2021 Location on Consolidated Condensed Balance Sheet Asset Fair Value Liabilities Fair Value Net Derivatives designated as hedged instruments: Foreign exchange contracts Prepaid expenses and other current assets $ 5,331 $ (430) $ 4,901 Foreign exchange contracts Other long-term liabilities 82 (161) (79) $ 5,413 $ (591) $ 4,822 Derivatives not designated as hedging instruments: Foreign exchange contracts Other current liabilities 38 (180) (142) Total derivatives $ 5,451 $ (771) $ 4,680 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory | Inventories consist of the following: September 30, December 31, Raw materials $ 111,431 $ 83,386 Work-in-process 26,967 17,449 Finished goods 166,415 130,809 Total $ 304,813 $ 231,644 |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of calculation of basic and diluted earnings (loss) per share | The following table sets forth the computation of basic and diluted earnings (loss) per share for the three and nine months ended September 30, 2022 and 2021: Three Months Ended September 30, 2022 Three Months Ended September 30, 2021 Basic EPS Adjustments Diluted EPS Basic EPS Adjustments Diluted EPS Net income $ 46,150 — $ 46,150 $ 14,948 — $ 14,948 Weighted average shares outstanding 30,473 — 30,473 29,179 — 29,179 Employee stock compensation — 585 585 — 1,252 1,252 Warrants — — — — 468 468 Convertible notes — 45 45 — 1,244 1,244 30,473 630 31,103 29,179 2,964 32,143 EPS $ 1.51 $ 1.48 $ 0.51 $ 0.47 Nine Months Ended September 30, 2022 Nine Months Ended September 30, 2021 Basic EPS Adjustments Diluted EPS Basic EPS Adjustments Diluted EPS Net income (loss) $ (107,166) — $ (107,166) $ 38,098 — $ 38,098 Weighted average shares outstanding 29,892 — 29,892 29,097 — 29,097 Employee stock compensation — — — — 1,283 1,283 Warrants — — — — 427 427 Convertible notes — — — — 1,213 1,213 29,892 — 29,892 29,097 2,923 32,020 EPS $ (3.59) $ (3.59) $ 1.31 $ 1.19 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The changes in the net carrying amount of goodwill for the nine months ended September 30, 2022 are as follows: Balance as of December 31, 2021 $ 617,528 Goodwill resulting from business acquisitions 198,992 Foreign currency translation (2,260) Balance as of September 30, 2022 $ 814,260 |
Schedule of Finite-Lived Intangible Assets | Other intangible assets consist of the following: September 30, 2022 December 31, 2021 Weighted Average Amortization Period (Years) Gross Accumulated Gross Accumulated Intangible assets with definite lives: 21 Customer and distributor relationships 24 $ 369,643 $ (166,190) $ 342,452 $ (152,934) Sales representation, marketing and promotional rights 25 149,376 (64,500) 149,376 (60,000) Developed technology 18 320,204 (32,368) 106,604 (26,495) Patents and other intangible assets 15 78,808 (52,064) 76,392 (50,890) Intangible assets with indefinite lives: Trademarks and tradenames 86,544 — 86,544 — $ 1,004,575 $ (315,122) $ 761,368 $ (290,319) |
Schedule of Indefinite-Lived Intangible Assets | Other intangible assets consist of the following: September 30, 2022 December 31, 2021 Weighted Average Amortization Period (Years) Gross Accumulated Gross Accumulated Intangible assets with definite lives: 21 Customer and distributor relationships 24 $ 369,643 $ (166,190) $ 342,452 $ (152,934) Sales representation, marketing and promotional rights 25 149,376 (64,500) 149,376 (60,000) Developed technology 18 320,204 (32,368) 106,604 (26,495) Patents and other intangible assets 15 78,808 (52,064) 76,392 (50,890) Intangible assets with indefinite lives: Trademarks and tradenames 86,544 — 86,544 — $ 1,004,575 $ (315,122) $ 761,368 $ (290,319) |
Schedule of Estimated Amortization Expense | The estimated intangible asset amortization expense remaining for the year ending December 31, 2022 and for each of the five succeeding years is as follows: Amortization included in expense Amortization recorded as a reduction of revenue Total Remaining, 2022 $ 7,487 $ 1,500 $ 8,987 2023 29,263 6,000 35,263 2024 28,947 6,000 34,947 2025 29,423 6,000 35,423 2026 29,196 6,000 35,196 2027 30,235 6,000 36,235 |
Long Term Debt (Tables)
Long Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | Long-term debt consists of the following: September 30, 2022 December 31, 2021 Revolving line of credit $ 53,000 $ 140,000 Term loan, net of deferred debt issuance costs of $781 and $1,373 in 2022 and 2021, respectively 133,807 226,196 2.625% convertible notes, net of deferred debt issuance costs of $531 and $3,700 in 2022 and 2021, respectively, and unamortized discount of $23,404 in 2021 69,469 317,896 2.250% convertible notes, net of deferred debt issuance costs of $19,898 in 2022 780,102 — Financing leases 297 564 Total debt 1,036,675 684,656 Less: Current portion 237 12,249 Total long-term debt $ 1,036,438 $ 672,407 |
Schedule of Maturities of Long-Term Debt | The scheduled maturities of long-term debt outstanding at September 30, 2022 are as follows: Remaining 2022 $ — 2023 — 2024 70,000 2025 — 2026 187,588 2027 800,000 The above amounts exclude deferred debt issuance costs and financing leases. |
Guarantees (Tables)
Guarantees (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Guarantees [Abstract] | |
Changes in the carrying amount of service and product warranties | Changes in the liability for standard warranties for the nine months ended September 30, are as follows: 2022 2021 Balance as of January 1, $ 2,344 $ 1,826 Provision for warranties 297 1,235 Claims made (624) (683) Balance as of September 30, $ 2,017 $ 2,378 |
Pension Plan (Tables)
Pension Plan (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Retirement Benefits [Abstract] | |
Schedule of net benefit cost | Net periodic pension cost consists of the following: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Service cost $ 269 $ 248 $ 807 $ 744 Interest cost on projected benefit obligation 537 451 1,611 1,353 Expected return on plan assets (1,324) (1,289) (3,972) (3,867) Net amortization and deferral 647 832 1,941 2,496 Net periodic pension cost $ 129 $ 242 $ 387 $ 726 |
Acquisition and Other Expense (
Acquisition and Other Expense (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Acquisition and Other Expense [Abstract] | |
Schedule of Acquisition and Other Operating Expense | Acquisition and other expense consists of the following: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Acquisition costs included in cost of sales $ 2,096 $ — $ 2,445 $ — Acquisition costs $ 3,706 $ — $ 6,306 $ — Legal matters — — 775 — Restructuring and related costs — — — 414 Acquisition and other costs included in selling and administrative expense $ 3,706 $ — $ 7,081 $ 414 Convertible notes premium on extinguishment $ — $ — $ 103,125 $ — Change in fair value of convertible notes hedges upon settlement — — 5,460 — Loss on early extinguishment of debt — 1,127 3,426 1,127 Debt related costs included in other expense $ — $ 1,127 $ 112,011 $ 1,127 |
Business Segment (Tables)
Business Segment (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Schedule of net sales information by product line | These product lines' net sales are as follows: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Orthopedic surgery $ 118,618 $ 105,751 $ 346,317 $ 320,809 General surgery 156,470 143,076 448,288 415,856 Consolidated net sales $ 275,088 $ 248,827 $ 794,605 $ 736,665 |
New Accounting Pronouncements_2
New Accounting Pronouncements (Details) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | |||||||
Jun. 06, 2022 | Sep. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Jan. 01, 2022 | Dec. 31, 2021 | Jan. 29, 2019 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Long-term debt | $ 1,036,438 | $ 1,036,438 | $ 672,407 | ||||||
Paid-in capital | 407,095 | 407,095 | 396,771 | ||||||
Deferred income taxes | 112,578 | 112,578 | 68,537 | ||||||
Retained earnings | 392,144 | 392,144 | $ 496,605 | ||||||
Interest expense | $ 8,536 | $ 8,145 | $ 19,462 | $ 27,917 | |||||
Incremental Common Shares Attributable to Dilutive Effect of Conversion of Debt Securities (in shares) | 45 | 1,244 | 0 | 1,213 | |||||
Repayments of Convertible Debt | $ 275,000 | $ 0 | |||||||
2.625 Percent Convertible Notes Due 2024 | Convertible Notes Payable [Member] | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Interest rate, stated percentage | 2.625% | ||||||||
Repayments of Convertible Debt | $ 275,000 | ||||||||
Debt instrument, face amount | $ 70,000 | $ 70,000 | $ 345,000 | ||||||
Accounting Standards Update 2020-06 | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Long-term debt | $ 22,600 | ||||||||
Paid-in capital | (37,900) | ||||||||
Deferred income taxes | (5,500) | ||||||||
Retained earnings | $ 20,800 | ||||||||
Interest expense | $ (2,600) | ||||||||
Incremental Common Shares Attributable to Dilutive Effect of Conversion of Debt Securities (in shares) | 2,500 |
Business Combinations (Details)
Business Combinations (Details) $ in Thousands | 3 Months Ended | 4 Months Ended | 9 Months Ended | |||||
Aug. 09, 2022 USD ($) | Jun. 13, 2022 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | |
Business Acquisition [Line Items] | ||||||||
Goodwill | $ 814,260 | $ 814,260 | $ 814,260 | $ 617,528 | ||||
Net sales | 275,088 | $ 248,827 | $ 794,605 | $ 736,665 | ||||
In2Bones Global Inc | ||||||||
Business Acquisition [Line Items] | ||||||||
Business Combination, Consideration Transferred | $ 145,200 | |||||||
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High | 110,000 | |||||||
Cash | 445 | |||||||
Accounts receivable, net | 5,036 | |||||||
Inventories | 24,247 | |||||||
Prepaid expenses and other current assets | 403 | |||||||
Current assets | 30,131 | |||||||
Goodwill | 139,816 | |||||||
Other long-term assets | 2,875 | |||||||
Total assets acquired | 237,722 | |||||||
Current liabilities assumed | 5,972 | |||||||
Deferred income taxes | 16,699 | |||||||
Contingent consideration | 69,402 | |||||||
Other long-term liabilities | 466 | |||||||
Total liabilities assumed | 92,539 | |||||||
Net assets acquired | $ 145,183 | |||||||
Net sales | $ 10,000 | $ 12,100 | ||||||
Biorez Inc | ||||||||
Business Acquisition [Line Items] | ||||||||
Business Combination, Consideration Transferred | $ 85,900 | |||||||
Payments to acquire businesses, gross | 83,100 | |||||||
Purchase Price Adjustment Holdback | 2,800 | |||||||
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High | 165,000 | |||||||
Cash | 742 | |||||||
Accounts receivable, net | 318 | |||||||
Inventories | 61 | |||||||
Prepaid expenses and other current assets | 118 | |||||||
Current assets | 1,239 | |||||||
Goodwill | 59,176 | |||||||
Other long-term assets | 112 | |||||||
Total assets acquired | 238,427 | |||||||
Current liabilities assumed | 1,441 | |||||||
Deferred income taxes | 36,621 | |||||||
Contingent consideration | 114,512 | |||||||
Other long-term liabilities | 0 | |||||||
Total liabilities assumed | 152,574 | |||||||
Net assets acquired | $ 85,853 | |||||||
Measurement Input, Discount Rate | Fair Value, Recurring | Fair Value, Inputs, Level 3 | In2Bones Global Inc | ||||||||
Business Acquisition [Line Items] | ||||||||
Business Combination, Contingent Consideration, Liability, Measurement Input | 0.0567 | |||||||
Measurement Input, Discount Rate | Fair Value, Recurring | Fair Value, Inputs, Level 3 | Biorez Inc | ||||||||
Business Acquisition [Line Items] | ||||||||
Business Combination, Contingent Consideration, Liability, Measurement Input | 0.1034 | |||||||
Measurement Input, Revenue Volatility | Fair Value, Recurring | Fair Value, Inputs, Level 3 | In2Bones Global Inc | ||||||||
Business Acquisition [Line Items] | ||||||||
Business Combination, Contingent Consideration, Liability, Measurement Input | 0.1275 | |||||||
Measurement Input, Revenue Volatility | Fair Value, Recurring | Fair Value, Inputs, Level 3 | Biorez Inc | ||||||||
Business Acquisition [Line Items] | ||||||||
Business Combination, Contingent Consideration, Liability, Measurement Input | 0.1887 | |||||||
Developed technology | In2Bones Global Inc | ||||||||
Business Acquisition [Line Items] | ||||||||
Finite-lived intangible assets | $ 37,300 | |||||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 15 years | |||||||
Developed technology | Biorez Inc | ||||||||
Business Acquisition [Line Items] | ||||||||
Finite-lived intangible assets | $ 176,300 | |||||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 20 years | |||||||
Distributor Relationships | In2Bones Global Inc | ||||||||
Business Acquisition [Line Items] | ||||||||
Finite-lived intangible assets | $ 27,600 | |||||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 15 years | |||||||
Distributor Relationships | Biorez Inc | ||||||||
Business Acquisition [Line Items] | ||||||||
Finite-lived intangible assets | $ 0 | |||||||
Trademarks & tradenames | In2Bones Global Inc | ||||||||
Business Acquisition [Line Items] | ||||||||
Finite-lived intangible assets | $ 0 | |||||||
Trademarks & tradenames | Biorez Inc | ||||||||
Business Acquisition [Line Items] | ||||||||
Finite-lived intangible assets | $ 1,600 | |||||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 20 years |
Revenues (Disaggregated Revenue
Revenues (Disaggregated Revenues) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Net Sales | $ 275,088 | $ 248,827 | $ 794,605 | $ 736,665 |
Goods transferred at a point in time | ||||
Disaggregation of Revenue [Line Items] | ||||
Net Sales | 263,731 | 238,187 | 760,769 | 704,026 |
Services transferred over time | ||||
Disaggregation of Revenue [Line Items] | ||||
Net Sales | 11,357 | 10,640 | 33,836 | 32,639 |
Orthopedic Surgery | ||||
Disaggregation of Revenue [Line Items] | ||||
Net Sales | 118,618 | 105,751 | 346,317 | 320,809 |
Orthopedic Surgery | Goods transferred at a point in time | ||||
Disaggregation of Revenue [Line Items] | ||||
Net Sales | 108,875 | 96,389 | 317,140 | 291,728 |
Orthopedic Surgery | Services transferred over time | ||||
Disaggregation of Revenue [Line Items] | ||||
Net Sales | 9,743 | 9,362 | 29,177 | 29,081 |
General Surgery | ||||
Disaggregation of Revenue [Line Items] | ||||
Net Sales | 156,470 | 143,076 | 448,288 | 415,856 |
General Surgery | Goods transferred at a point in time | ||||
Disaggregation of Revenue [Line Items] | ||||
Net Sales | 154,856 | 141,798 | 443,629 | 412,298 |
General Surgery | Services transferred over time | ||||
Disaggregation of Revenue [Line Items] | ||||
Net Sales | 1,614 | 1,278 | 4,659 | 3,558 |
United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Net Sales | 155,721 | 136,401 | 436,131 | 403,933 |
United States | Orthopedic Surgery | ||||
Disaggregation of Revenue [Line Items] | ||||
Net Sales | 45,688 | 37,957 | 124,097 | 115,864 |
United States | General Surgery | ||||
Disaggregation of Revenue [Line Items] | ||||
Net Sales | 110,033 | 98,444 | 312,034 | 288,069 |
Americas (excluding the United States) | ||||
Disaggregation of Revenue [Line Items] | ||||
Net Sales | 26,688 | 24,736 | 80,714 | 71,497 |
Americas (excluding the United States) | Orthopedic Surgery | ||||
Disaggregation of Revenue [Line Items] | ||||
Net Sales | 17,774 | 16,122 | 53,932 | 47,215 |
Americas (excluding the United States) | General Surgery | ||||
Disaggregation of Revenue [Line Items] | ||||
Net Sales | 8,914 | 8,614 | 26,782 | 24,282 |
Europe, Middle East & Africa | ||||
Disaggregation of Revenue [Line Items] | ||||
Net Sales | 47,214 | 44,060 | 152,048 | 135,921 |
Europe, Middle East & Africa | Orthopedic Surgery | ||||
Disaggregation of Revenue [Line Items] | ||||
Net Sales | 26,914 | 24,155 | 88,955 | 77,327 |
Europe, Middle East & Africa | General Surgery | ||||
Disaggregation of Revenue [Line Items] | ||||
Net Sales | 20,300 | 19,905 | 63,093 | 58,594 |
Asia Pacific | ||||
Disaggregation of Revenue [Line Items] | ||||
Net Sales | 45,465 | 43,630 | 125,712 | 125,314 |
Asia Pacific | Orthopedic Surgery | ||||
Disaggregation of Revenue [Line Items] | ||||
Net Sales | 28,242 | 27,517 | 79,333 | 80,403 |
Asia Pacific | General Surgery | ||||
Disaggregation of Revenue [Line Items] | ||||
Net Sales | $ 17,223 | $ 16,113 | $ 46,379 | $ 44,911 |
Revenues (Customer Liability) (
Revenues (Customer Liability) (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |||
Contract liability | $ 17,551 | $ 16,760 | |
Revenue recognized | $ 9,500 | $ 8,400 |
Comprehensive Income (Loss) (De
Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Equity [Abstract] | ||||||||
Net income (loss) | $ 46,150 | $ 14,948 | $ (107,166) | $ 38,098 | ||||
Cash flow hedging gain, net | 4,833 | 2,917 | 10,577 | 8,064 | ||||
Pension liability, net of income tax | 490 | 631 | 1,502 | 1,893 | ||||
Foreign currency translation adjustments | (8,348) | (4,740) | (18,009) | (5,813) | ||||
Comprehensive income (loss) | 43,125 | $ (172,636) | $ 16,415 | 13,756 | $ 17,743 | $ 10,743 | (113,096) | 42,242 |
Pension liability, tax | 157 | 201 | 439 | 603 | ||||
Cash flow hedging gain, tax | $ 1,546 | $ 929 | $ 3,384 | $ 2,568 |
Comprehensive Income (Loss) (Ac
Comprehensive Income (Loss) (Accumulated Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | ||
Accumulated other comprehensive income (loss) [Roll Forward] | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax | $ (54,203) | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax | (60,133) | ||
Accumulated Other Comprehensive Loss | |||
Accumulated other comprehensive income (loss) [Roll Forward] | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax | (54,203) | $ (63,681) | |
Other comprehensive income (loss) before reclassifications, net of tax | 702 | (672) | |
Amounts reclassified from other accumulated comprehensive income (loss) before tax | [1] | (8,795) | 6,350 |
Reclassification from AOCI, Current Period, Tax | 2,163 | (1,534) | |
Net current-period other comprehensive income (loss) | (5,930) | 4,144 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax | (60,133) | (59,537) | |
Cash Flow Hedging Gain (Loss) | |||
Accumulated other comprehensive income (loss) [Roll Forward] | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax | 3,656 | (5,945) | |
Other comprehensive income (loss) before reclassifications, net of tax | 18,711 | 5,141 | |
Amounts reclassified from other accumulated comprehensive income (loss) before tax | [1] | (10,736) | 3,854 |
Reclassification from AOCI, Current Period, Tax | 2,602 | (931) | |
Net current-period other comprehensive income (loss) | 10,577 | 8,064 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax | 14,233 | 2,119 | |
Pension Liability | |||
Accumulated other comprehensive income (loss) [Roll Forward] | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax | (29,671) | (36,620) | |
Other comprehensive income (loss) before reclassifications, net of tax | 0 | 0 | |
Amounts reclassified from other accumulated comprehensive income (loss) before tax | [1] | 1,941 | 2,496 |
Reclassification from AOCI, Current Period, Tax | (439) | (603) | |
Net current-period other comprehensive income (loss) | 1,502 | 1,893 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax | (28,169) | (34,727) | |
Cumulative Translation Adjustments | |||
Accumulated other comprehensive income (loss) [Roll Forward] | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax | (28,188) | (21,116) | |
Other comprehensive income (loss) before reclassifications, net of tax | (18,009) | (5,813) | |
Amounts reclassified from other accumulated comprehensive income (loss) before tax | [1] | 0 | 0 |
Reclassification from AOCI, Current Period, Tax | 0 | 0 | |
Net current-period other comprehensive income (loss) | (18,009) | (5,813) | |
Accumulated Other Comprehensive Income (Loss), Net of Tax | $ (46,197) | $ (26,929) | |
[1]The cash flow hedging gain (loss) and pension liability accumulated other comprehensive income (loss) components are included in sales or cost of sales and as a component of net periodic pension cost, respectively. Refer to Note 7 and Note 13, respectively, for further details. |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments (Amounts Recorded In and Reclassified From AOCI) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Net sales | $ 275,088 | $ 248,827 | $ 794,605 | $ 736,665 |
Cost of sales | 123,473 | 106,521 | 355,222 | 324,485 |
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), before Reclassification and Tax | 11,695 | 3,188 | 24,698 | 6,778 |
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), before Reclassification, Tax | 2,835 | 770 | 5,987 | 1,637 |
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), before Reclassification, after Tax | 8,860 | 2,418 | 18,711 | 5,141 |
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), Reclassification, before Tax | 5,315 | (658) | 10,736 | (3,854) |
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), Reclassification, Tax | 1,288 | (159) | 2,602 | (931) |
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), Reclassification, after Tax | 4,027 | (499) | 8,134 | (2,923) |
Revenues | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), Reclassification, before Tax | 5,090 | (1,077) | 10,237 | (4,948) |
Cost of Sales | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), Reclassification, before Tax | $ 225 | $ 419 | $ 499 | $ 1,094 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments (Foreign Currency Forward Contracts) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Derivative [Line Items] | |||||
Foreign Currency Transaction Gain (Loss), before Tax | $ (1,110) | $ (441) | $ (2,874) | $ (1,320) | |
Derivative Assets and Liabilities at Fair Value [Abstract] | |||||
Asset Fair Value | 19,072 | 19,072 | $ 5,451 | ||
Liabilities Fair Value | (355) | (355) | (771) | ||
Net Fair Value | 18,717 | 18,717 | 4,680 | ||
Foreign Currency Forward Contracts | |||||
Derivative [Line Items] | |||||
Gain (Loss) on Foreign Currency Derivative Instruments Not Designated as Hedging Instruments | 892 | $ (48) | 1,088 | $ (398) | |
Derivatives designated as hedged instruments: | Foreign Currency Forward Contracts | |||||
Derivative Assets and Liabilities at Fair Value [Abstract] | |||||
Asset Fair Value | 19,019 | 19,019 | 5,413 | ||
Liabilities Fair Value | (231) | (231) | (591) | ||
Net Fair Value | 18,788 | 18,788 | 4,822 | ||
Derivatives designated as hedged instruments: | Foreign Currency Forward Contracts | Prepaid Expenses and Other Current Assets [Member] | |||||
Derivative Assets and Liabilities at Fair Value [Abstract] | |||||
Asset Fair Value | 15,922 | 15,922 | 5,331 | ||
Liabilities Fair Value | (172) | (172) | (430) | ||
Net Fair Value | 15,750 | 15,750 | 4,901 | ||
Derivatives designated as hedged instruments: | Foreign Currency Forward Contracts | Other Noncurrent Liabilities [Member] | |||||
Derivative Assets and Liabilities at Fair Value [Abstract] | |||||
Asset Fair Value | 82 | ||||
Liabilities Fair Value | (161) | ||||
Net Fair Value | (79) | ||||
Derivatives designated as hedged instruments: | Foreign Currency Forward Contracts | Other Noncurrent Assets [Member] | |||||
Derivative Assets and Liabilities at Fair Value [Abstract] | |||||
Asset Fair Value | 3,097 | 3,097 | |||
Liabilities Fair Value | (59) | (59) | |||
Net Fair Value | 3,038 | $ 3,038 | |||
Derivatives not designated as hedging instruments: | Foreign Currency Forward Contracts | |||||
Derivative [Line Items] | |||||
Maximum Length of Time Hedged in Cash Flow Hedge | 1 month | ||||
Notional amount of cash flow hedges | 37,057 | $ 37,057 | 38,897 | ||
Derivatives not designated as hedging instruments: | Foreign Currency Forward Contracts | Other Current Liabilities [Member] | |||||
Derivative Assets and Liabilities at Fair Value [Abstract] | |||||
Asset Fair Value | 53 | 53 | 38 | ||
Liabilities Fair Value | (124) | (124) | (180) | ||
Net Fair Value | (71) | $ (71) | (142) | ||
Cash flow hedge | Foreign Currency Forward Contracts | |||||
Derivative [Line Items] | |||||
Maximum Length of Time Hedged in Cash Flow Hedge | 2 years | ||||
Notional amount of cash flow hedges | 196,749 | $ 196,749 | $ 172,894 | ||
Foreign Currency Cash Flow Hedge Gain (Loss) to be Reclassified During Next 12 Months | $ 11,900 | $ 11,900 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 111,431 | $ 83,386 |
Work-in-process | 26,967 | 17,449 |
Finished goods | 166,415 | 130,809 |
Total inventory | $ 304,813 | $ 231,644 |
Earnings (Loss) Per Share (Deta
Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Earnings Per Share [Abstract] | ||||
Net income (loss) | $ 46,150 | $ 14,948 | $ (107,166) | $ 38,098 |
Interest on Convertible Debt, Net of Tax | 0 | 0 | 0 | 0 |
Net Income (Loss) Available to Common Stockholders, Diluted | $ 46,150 | $ 14,948 | $ (107,166) | $ 38,098 |
Basic-weighted average shares outstanding (in shares) | 30,473,000 | 29,179,000 | 29,892,000 | 29,097,000 |
Incremental Common Shares Attributable to Dilutive Effect of Share-based Payment Arrangements (in shares) | 585,000 | 1,252,000 | 0 | 1,283,000 |
Incremental Common Shares Attributable to Dilutive Effect of Call Options and Warrants (in shares) | 0 | 468,000 | 0 | 427,000 |
Incremental Common Shares Attributable to Dilutive Effect of Conversion of Debt Securities (in shares) | 45,000 | 1,244,000 | 0 | 1,213,000 |
Effect of dilutive potential securities (in shares) | 630,000 | 2,964,000 | 0 | 2,923,000 |
Diluted- weighted average shares outstanding (in shares) | 31,103,000 | 32,143,000 | 29,892,000 | 32,020,000 |
Basic (in dollars per share) | $ 1.51 | $ 0.51 | $ (3.59) | $ 1.31 |
Diluted (in dollars per share) | $ 1.48 | $ 0.47 | $ (3.59) | $ 1.19 |
Antidilutive securities excluded from computation of earnings per share (in shares) | 2,000,000 | 700,000 | 0 | 500,000 |
Earnings (Loss) Per Share - Con
Earnings (Loss) Per Share - Convertible Notes (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | |||
Jun. 06, 2022 | Jan. 29, 2019 | Sep. 30, 2022 | Sep. 30, 2021 | |
Debt Instrument [Line Items] | ||||
Repayments of Convertible Debt | $ 275,000 | $ 0 | ||
Convertible Notes Payable | 2.625 Percent Convertible Notes Due 2024 | ||||
Debt Instrument [Line Items] | ||||
Interest rate, stated percentage | 2.625% | |||
Debt instrument, face amount | $ 345,000 | $ 70,000 | ||
Conversion price (in dollars per share) | $ 88.80 | |||
Repayments of Convertible Debt | $ 275,000 | |||
Convertible Notes Payable | 2.625 Percent Convertible Notes Due 2024 | Hedge transactions | ||||
Debt Instrument [Line Items] | ||||
Option indexed to issuer's equity, strike price (in dollars per share) | 114.92 | |||
Convertible Notes Payable | 2.625 Percent Convertible Notes Due 2024 | Warrant | ||||
Debt Instrument [Line Items] | ||||
Option indexed to issuer's equity, strike price (in dollars per share) | $ 114.92 | |||
Convertible Notes Payable | 2.250 Percent Convertible Notes Due 2027 | ||||
Debt Instrument [Line Items] | ||||
Interest rate, stated percentage | 2.25% | |||
Debt instrument, face amount | $ 800,000 | |||
Conversion price (in dollars per share) | $ 145.33 | |||
Convertible Notes Payable | 2.250 Percent Convertible Notes Due 2027 | Hedge transactions | ||||
Debt Instrument [Line Items] | ||||
Option indexed to issuer's equity, strike price (in dollars per share) | 251.53 | |||
Convertible Notes Payable | 2.250 Percent Convertible Notes Due 2027 | Warrant | ||||
Debt Instrument [Line Items] | ||||
Option indexed to issuer's equity, strike price (in dollars per share) | $ 251.53 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets (Goodwill) (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2022 | Aug. 09, 2022 | Jun. 13, 2022 | |
Goodwill [Roll Forward] | |||
Beginning balance | $ 617,528 | ||
Goodwill, Acquired During Period | 198,992 | ||
Foreign currency translation | (2,260) | ||
Ending balance | 814,260 | ||
Goodwill [Line Items] | |||
Goodwill | $ 814,260 | ||
In2Bones Global Inc | |||
Goodwill [Line Items] | |||
Goodwill | $ 139,816 | ||
Biorez Inc | |||
Goodwill [Line Items] | |||
Goodwill | $ 59,176 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets (Intangible Assets) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Aug. 09, 2022 | Jun. 13, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Schedule of Finite-Lived and Indefinite-Lived Assets [Line Items] | |||||||
Intangible assets, Gross carrying amount | $ 1,004,575 | $ 1,004,575 | $ 761,368 | ||||
Intangible assets, Accumulated amortization | (315,122) | (315,122) | (290,319) | ||||
Amortization expense | 8,700 | $ 8,300 | 24,900 | $ 24,900 | |||
Future amortization expense [Abstract] | |||||||
Remaining, 2022 | 8,987 | 8,987 | |||||
2023 | 35,263 | 35,263 | |||||
2024 | 34,947 | 34,947 | |||||
2025 | 35,423 | 35,423 | |||||
2026 | 35,196 | 35,196 | |||||
2027 | 36,235 | 36,235 | |||||
In2Bones Global Inc | |||||||
Future amortization expense [Abstract] | |||||||
Finite-lived Intangible Assets Acquired | $ 64,900 | ||||||
Biorez Inc | |||||||
Future amortization expense [Abstract] | |||||||
Finite-lived Intangible Assets Acquired | $ 177,900 | ||||||
Amortization included in expense | |||||||
Future amortization expense [Abstract] | |||||||
Remaining, 2022 | 7,487 | 7,487 | |||||
2023 | 29,263 | 29,263 | |||||
2024 | 28,947 | 28,947 | |||||
2025 | 29,423 | 29,423 | |||||
2026 | 29,196 | 29,196 | |||||
2027 | 30,235 | 30,235 | |||||
Amortization recorded as a reduction of revenue | |||||||
Future amortization expense [Abstract] | |||||||
Remaining, 2022 | 1,500 | 1,500 | |||||
2023 | 6,000 | 6,000 | |||||
2024 | 6,000 | 6,000 | |||||
2025 | 6,000 | 6,000 | |||||
2026 | 6,000 | 6,000 | |||||
2027 | 6,000 | 6,000 | |||||
Trademarks & tradenames | |||||||
Schedule of Finite-Lived and Indefinite-Lived Assets [Line Items] | |||||||
Unamortized intangible assets, Gross carrying amount | 86,544 | 86,544 | 86,544 | ||||
Customer and distributor relationships | |||||||
Schedule of Finite-Lived and Indefinite-Lived Assets [Line Items] | |||||||
Amortized intangible assets, Gross carrying amount | 369,643 | 369,643 | 342,452 | ||||
Intangible assets, Accumulated amortization | (166,190) | (166,190) | (152,934) | ||||
Sales representation, marketing and promotional rights | |||||||
Schedule of Finite-Lived and Indefinite-Lived Assets [Line Items] | |||||||
Amortized intangible assets, Gross carrying amount | 149,376 | 149,376 | 149,376 | ||||
Intangible assets, Accumulated amortization | (64,500) | (64,500) | (60,000) | ||||
Patents and other intangible assets | |||||||
Schedule of Finite-Lived and Indefinite-Lived Assets [Line Items] | |||||||
Amortized intangible assets, Gross carrying amount | 78,808 | 78,808 | 76,392 | ||||
Intangible assets, Accumulated amortization | (52,064) | (52,064) | (50,890) | ||||
Developed technology | |||||||
Schedule of Finite-Lived and Indefinite-Lived Assets [Line Items] | |||||||
Amortized intangible assets, Gross carrying amount | 320,204 | 320,204 | 106,604 | ||||
Intangible assets, Accumulated amortization | $ (32,368) | $ (32,368) | $ (26,495) | ||||
Weighted Average | |||||||
Schedule of Finite-Lived and Indefinite-Lived Assets [Line Items] | |||||||
Finite-lived intangible asset useful life (in years) | 21 years | ||||||
Weighted Average | Customer and distributor relationships | |||||||
Schedule of Finite-Lived and Indefinite-Lived Assets [Line Items] | |||||||
Finite-lived intangible asset useful life (in years) | 24 years | ||||||
Weighted Average | Sales representation, marketing and promotional rights | |||||||
Schedule of Finite-Lived and Indefinite-Lived Assets [Line Items] | |||||||
Finite-lived intangible asset useful life (in years) | 25 years | ||||||
Weighted Average | Patents and other intangible assets | |||||||
Schedule of Finite-Lived and Indefinite-Lived Assets [Line Items] | |||||||
Finite-lived intangible asset useful life (in years) | 15 years | ||||||
Weighted Average | Developed technology | |||||||
Schedule of Finite-Lived and Indefinite-Lived Assets [Line Items] | |||||||
Finite-lived intangible asset useful life (in years) | 18 years |
Long Term Debt (Details)
Long Term Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Long-term Debt and Lease Obligation, Including Current Maturities | $ 1,036,675 | $ 684,656 |
Finance Lease, Liability | 297 | 564 |
Current portion of long-term debt | 237 | 12,249 |
Long-term debt | 1,036,438 | 672,407 |
Line of Credit [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt | 53,000 | 140,000 |
Term Loan Facility [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt | 133,807 | 226,196 |
Unamortized Debt Issuance Expense | 781 | 1,373 |
2.625 Percent Convertible Notes Due 2024 | Convertible Notes Payable [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Unamortized Discount | 23,404 | |
Unamortized Debt Issuance Expense | 531 | 3,700 |
Convertible Debt | 69,469 | 317,896 |
2.250 Percent Convertible Notes Due 2027 | Convertible Notes Payable [Member] | ||
Debt Instrument [Line Items] | ||
Unamortized Debt Issuance Expense | 19,898 | |
Convertible Debt | $ 780,102 | $ 0 |
Long Term Debt Additional Infor
Long Term Debt Additional Information (Details) $ / shares in Units, shares in Millions | 3 Months Ended | 9 Months Ended | ||||||
Jun. 06, 2022 USD ($) $ / shares | Jan. 29, 2019 USD ($) $ / shares | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) shares | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | Jul. 16, 2021 USD ($) | |
Debt Instrument [Line Items] | ||||||||
Amortization of debt discount | $ 0 | $ 7,611,000 | ||||||
Repayments of Senior Debt | 92,981,000 | 63,673,000 | ||||||
Loss on early extinguishment of debt | $ 3,426,000 | 899,000 | ||||||
Debt Conversion, Converted Instrument, Shares Issued | shares | 0.9 | |||||||
Loss on convertible notes conversion premium | $ 103,125,000 | 0 | ||||||
Fair Value of Convertible Notes Hedges and Warrants Net | $ 22,200,000 | |||||||
Purchases of Convertible Notes Hedges | 187,600,000 | 187,600,000 | 0 | |||||
Purchases of Convertible Notes Hedges, Net of Tax | 142,100,000 | |||||||
Net Proceeds From the Settlement of Convertible Note Hedge Transactions and Warrants | 16,700,000 | |||||||
Repayments of Convertible Debt | 275,000,000 | 0 | ||||||
Loss on convertible notes hedge transactions | 5,460,000 | 0 | ||||||
Proceeds from issuance of warrants | 72,000,000 | 72,000,000 | 0 | |||||
Other Expense | ||||||||
Debt Instrument [Line Items] | ||||||||
Loss on convertible notes conversion premium | $ 0 | $ 0 | 103,125,000 | 0 | ||||
Loss on convertible notes hedge transactions | 0 | 0 | 5,460,000 | 0 | ||||
Term Loan Facility [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Long-term Debt, Gross | 134,600,000 | 134,600,000 | ||||||
Long-term Debt | 133,807,000 | 133,807,000 | $ 226,196,000 | |||||
Term Loan Facility [Member] | Amended and Restated Senior Credit Agreement [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, face amount | $ 233,500,000 | |||||||
Repayments of Senior Debt | 90,000,000 | |||||||
Loss on early extinguishment of debt | 500,000 | |||||||
Line of Credit [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Long-term Debt | 53,000,000 | 53,000,000 | $ 140,000,000 | |||||
Line of Credit Facility, Remaining Borrowing Capacity | 530,200,000 | 530,200,000 | ||||||
Letters of Credit Outstanding, Amount | 1,800,000 | 1,800,000 | ||||||
Line of Credit [Member] | Amended and Restated Senior Credit Agreement [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 585,000,000 | |||||||
Convertible Notes Payable [Member] | 2.625 Percent Convertible Notes Due 2024 | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, face amount | $ 345,000,000 | 70,000,000 | 70,000,000 | |||||
Debt Instrument, Convertible, Carrying Amount of Equity Component | $ 39,100,000 | |||||||
Amortization of debt discount | 2,600,000 | 7,600,000 | ||||||
Interest rate, stated percentage | 2.625% | |||||||
Debt Instrument, Interest Rate, Effective Percentage | 6.14% | |||||||
Interest Expense, Debt | 500,000 | $ 2,300,000 | 4,400,000 | $ 6,800,000 | ||||
Debt Instrument, Convertible, Gross Amount of Equity Component | $ 51,600,000 | |||||||
Conversion price (in dollars per share) | $ / shares | $ 88.80 | |||||||
Debt Instrument, Convertible, Conversion Ratio | 11.2608 | |||||||
Debt Instrument, Fair Value Disclosure | 77,100,000 | 77,100,000 | ||||||
Loss on early extinguishment of debt | 2,900,000 | |||||||
Loss on convertible notes conversion premium | 103,100,000 | |||||||
Repayments of Convertible Debt | 275,000,000 | |||||||
Convertible Notes Payable [Member] | 2.625 Percent Convertible Notes Due 2024 | Warrant | ||||||||
Debt Instrument [Line Items] | ||||||||
Option indexed to issuer's equity, strike price (in dollars per share) | $ / shares | $ 114.92 | |||||||
Convertible Notes Payable [Member] | 2.250 Percent Convertible Notes Due 2027 | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, face amount | $ 800,000,000 | |||||||
Interest rate, stated percentage | 2.25% | |||||||
Interest Expense, Debt | 4,500,000 | 5,800,000 | ||||||
Conversion price (in dollars per share) | $ / shares | $ 145.33 | |||||||
Debt Instrument, Convertible, Conversion Ratio | 6.8810 | |||||||
Debt Instrument, Fair Value Disclosure | $ 690,300,000 | $ 690,300,000 | ||||||
Convertible Notes Payable [Member] | 2.250 Percent Convertible Notes Due 2027 | Warrant | ||||||||
Debt Instrument [Line Items] | ||||||||
Option indexed to issuer's equity, strike price (in dollars per share) | $ / shares | $ 251.53 | |||||||
Long-term Debt [Member] | Amended and Restated Senior Credit Agreement [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt Instrument, Interest Rate, Effective Percentage | 4.25% | 4.25% | ||||||
Long-term Debt [Member] | Amended and Restated Senior Credit Agreement [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt Instrument, Basis Spread on Variable Rate | 1.125% | |||||||
Debt Instrument, Variable Rate Basis | 3.125% | |||||||
Long-term Debt [Member] | Amended and Restated Senior Credit Agreement [Member] | Adjusted LIBOR | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt Instrument, Basis Spread on Variable Rate | 1% | |||||||
Long-term Debt [Member] | Amended and Restated Senior Credit Agreement [Member] | Fed Funds Effective Rate Overnight Index Swap Rate [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt Instrument, Basis Spread on Variable Rate | 0.50% | |||||||
Call Option [Member] | Convertible Notes Payable [Member] | 2.625 Percent Convertible Notes Due 2024 | ||||||||
Debt Instrument [Line Items] | ||||||||
Hedge and warrant transactions, net cash paid | $ 21,000,000 | |||||||
Call Option [Member] | Convertible Notes Payable [Member] | 2.250 Percent Convertible Notes Due 2027 | ||||||||
Debt Instrument [Line Items] | ||||||||
Hedge and warrant transactions, net cash paid | $ 115,600,000 |
Long Term Debt Maturities of Lo
Long Term Debt Maturities of Long Term Debt (Details) $ in Thousands | Sep. 30, 2022 USD ($) |
Maturities of Long-term Debt [Abstract] | |
Remaining, 2022 | $ 0 |
2023 | 0 |
2024 | 70,000 |
2025 | 0 |
2026 | 187,588 |
2027 | $ 800,000 |
Guarantees (Details)
Guarantees (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Guarantees [Abstract] | ||
Standard warranty period (in years) | 1 year | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Balance as of January 1, | $ 2,344 | $ 1,826 |
Provision for warranties | 297 | 1,235 |
Claims made | (624) | (683) |
Balance as of September 30, | 2,017 | 2,378 |
Extended Product Warranty Disclosure [Abstract] | ||
Product extended warranty expense | $ 4,600 | $ 5,200 |
Pension Plan (Details)
Pension Plan (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Retirement Benefits [Abstract] | ||||
Service cost | $ 269 | $ 248 | $ 807 | $ 744 |
Interest cost on projected benefit obligation | 537 | 451 | 1,611 | 1,353 |
Expected return on plan assets | (1,324) | (1,289) | (3,972) | (3,867) |
Net amortization and deferral | 647 | 832 | 1,941 | 2,496 |
Net periodic pension cost | $ 129 | $ 242 | $ 387 | $ 726 |
Acquisition and Other Expense_2
Acquisition and Other Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Jun. 06, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Jan. 29, 2019 | |
Other Expense [Line Items] | ||||||
Loss on convertible notes conversion premium | $ 103,125 | $ 0 | ||||
Loss on convertible notes hedge transactions | 5,460 | 0 | ||||
Other expense | $ 0 | $ 1,127 | 112,011 | 1,127 | ||
Repayments of Senior Debt | 92,981 | 63,673 | ||||
Repayments of Convertible Debt | 275,000 | 0 | ||||
2.625 Percent Convertible Notes Due 2024 | Convertible Notes Payable [Member] | ||||||
Other Expense [Line Items] | ||||||
Loss on convertible notes conversion premium | 103,100 | |||||
Interest rate, stated percentage | 2.625% | |||||
Repayments of Convertible Debt | $ 275,000 | |||||
Amended and Restated Senior Credit Agreement [Member] | Term Loan Facility [Member] | ||||||
Other Expense [Line Items] | ||||||
Repayments of Senior Debt | 90,000 | |||||
Cost of Sales | ||||||
Other Expense [Line Items] | ||||||
Costs for inventory step-up adjustments | 2,096 | 0 | 2,445 | 0 | ||
Selling and Administrative Expenses | ||||||
Other Expense [Line Items] | ||||||
Acquisition and integration costs | 3,706 | 0 | 6,306 | 0 | ||
Litigation Settlement, Expense | 0 | 0 | 775 | 0 | ||
Restructuring and related costs | 0 | 0 | 0 | 414 | ||
Other expense | 3,706 | 0 | 7,081 | 414 | ||
Other Expense | ||||||
Other Expense [Line Items] | ||||||
Loss on convertible notes conversion premium | 0 | 0 | 103,125 | 0 | ||
Loss on convertible notes hedge transactions | 0 | 0 | 5,460 | 0 | ||
Loss on early extinguishment of debt | 0 | 1,127 | 3,426 | 1,127 | ||
Other expense | $ 0 | $ 1,127 | $ 112,011 | $ 1,127 |
Business Segment (Details)
Business Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Segment Reporting Information [Line Items] | ||||
Net sales | $ 275,088 | $ 248,827 | $ 794,605 | $ 736,665 |
Orthopedic Surgery | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 118,618 | 105,751 | 346,317 | 320,809 |
General Surgery | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | $ 156,470 | $ 143,076 | $ 448,288 | $ 415,856 |
Legal Proceedings (Details)
Legal Proceedings (Details) - USD ($) $ in Millions | Jan. 18, 2017 | Sep. 30, 2022 |
Loss Contingencies [Line Items] | ||
Product liability insurance, amount per incident | $ 35 | |
Product liability insurance, aggregate annual amount | $ 35 | |
Pending Litigation | EndoDynamix, Inc. | Liquidated Damages | ||
Loss Contingencies [Line Items] | ||
Loss Contingency, Damages Sought, Value | $ 12.7 | |
Pending Litigation | EndoDynamix, Inc. | Additional Damages | ||
Loss Contingencies [Line Items] | ||
Loss Contingency, Damages Sought, Value | $ 24.8 |